The 2019 Consumer Expenditure Survey from the Bureau of Labor Statistics estimates that between 2016 and 2020, Americans 65 and over will spend an average of $48,791 year on necessities like food, housing, transportation, and healthcare.
However, the average Social Security payment for retired workers is $1,619.67 per month or about $19,436.04 per year.
Social Security Payment
This sum is definitely insufficient to properly fund your retirement lifestyle if you want to rely solely on Social Security, as you’ll shortly come to know.
Your Social Security benefit is calculated using the Social Security Administration’s records of your 35 highest-earning years. You should check your Social Security income record before applying for benefits since any record could have inaccuracies or omissions.
According to Kimberly Foss, certified financial planner and owner of Empyrion Wealth Management, the first thing retirees should do with their Social Security check is to make sure they received the right amount. It’s time to properly budget your payment after you’ve made sure it’s accurate.
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You must monitor your outside earnings if you want to maximize your Social Security payments. Your Social Security payment will be decreased by $1 for every $2 you earn over $19,560 in 2022 if you are under the full retirement age.
Your pension would be lowered if you reached full retirement age in 2021 by $1 for every $3 you earned over $50,520 up until the month you reached full retirement age. There are no cutbacks to your Social Security benefits once you reach full retirement age.
Many articles have been written about the historically high cost-of-living-adjustment, or COLA, for Social Security benefits in 2023. To be eligible for the COLA rise, benefits do not have to be applied for before the new year.
Regardless of when you apply for benefits, this is because of the mechanism the Social Security Administration employs to calculate your benefit.
Now that you’ve taken action and filed early as you believed you had to qualify for the COLA, you do have a choice. You could make use of the once-only do-over option, which enables you to withdraw your application for benefits and pay back any benefits you’ve already received, erasing any prior filings from your record.
This can only be done once in your lifetime, and it has to be done within a year after your initial benefits application. Once you turned 70, you may reapply for benefits as you originally intended.
