When Maureen and I meet with people for the first time to explore if we are a good fit for us to help them reach their goals, one of the key questions that we ask is “What income will you need to have in your first year in retirement?” As retirement income planners, we need this information in order to determine what actions need to be taken and what the appropriate investment portfolio should be to help them accomplish generating this income.
For most people that we help, there will be 2 or 3 sources of income after they retire. For nearly everyone, there will be the income provided from their investments and the income that they will receive from Social Security. For some lucky others, they may be entailed to a pension from a former employer.
This post only deals with determining how you can determine what your current Social Security benefits are according to the Social Security Administration (SSA). We have found that most of our prospects do not know what they should expect and do not know where to obtain this information.
Years ago, the U.S. government via the SSA used to mail an individualized statement annually which highlighted the expected monthly amounts at 3 different “retirement” ages depending on your earnings history. The expected payouts are obviously lower if you take early retirement (early retirement currently is at age 62, then retirement around 66 or 67 years old and delayed retirement at 70 years old). These ages, have been and will likely be, increased going forward.
Now, in order to save approximately $70 million a year, the Social Security Administration has ended the annual mailings. Instead, you can get this information online by providing some personal information to verify your identity. You can see this information at their website: Click below to go directly to establish your account.Social Security Statement Online
What you will Need to DO when you get to the site: After entering your personal information and answering some questions pulled from your credit history, you can create an account and see the same information that was on the old paper statement. Remember that the Social Security Administration will only give you information about your benefits, but will not provide any recommendations on strategy. Ask your financial adviser for assistance.
But to begin the process of determining how much income you will need in retirement, you need to first determine how much will be coming from this source. So, if you come visit with us, you now know where to obtain this information.
As a reminder: Social Security is a compact between generations. Since 1935, America has kept the promise of security for its workers and their families. Now, however, the Social Security system is facing serious financial problems, and action is needed soon to make sure the system will be sound when today’s younger workers are ready for retirement.
Without changes, in 2033 the Social Security Trust Fund will be able to pay only about 75 cents for each dollar of scheduled benefits.* We need to resolve these issues soon to make sure Social Security continues to provide a foundation of protection for future generations. *These estimates are based on the intermediate assumptions from the Social Security Trustees’ Annual Report to the Congress.