Retirement Advice Corner

Social Security Facts

  • In February 2008, the nations’ first baby-boomer began collecting Social Security retirement benefits. Over the next two decades, another 78 million baby boomers will be receiving benefits.
  • In 2008, almost 50 million Americans will receive nearly $608 billion in Social Security benefits.
  • Social Security is the major source of income for most of the elderly. Nine out of ten individuals age 65 and older receive Social Security benefits. Social Security benefits represent 41% of the income of the elderly.
  • Social Security provides more than just retirement benefits. Retired workers and their dependents account for 69% of total benefits paid, disabled workers and their dependents account for 18%, and survivors of deceased workers account for the remaining 13%.
  • An estimated 165 million workers, 96% of all workers, are covered under Social Security.
  • By 2032, there will be almost twice as many older Americans as today -- from 38 million today to 72 million.
  • There are currently 3.3 workers for each Social Security beneficiary. By 2032, there will be 2.1 workers for each beneficiary.
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Advice Corner

Common Retirement Misconception

The following are seven common retirement misconceptions:
  • Retirees need to replace 100 percent of their pre-retirement income. In reality, most retired people will need between 65 to 85 percent to be secure.

  • Retirees will have enough resources to meet their need upon retirement In fact, studies indicate around 45 to 50% percent of working-age households are at risk of failing to meet this objective.

  • Young workers will be better prepared in retirement than Baby Boomers. In reality, younger workers are more vulnerable.

  • Most retirees expect social security will replace 42 percent of pre-retirement earnings. But in reality, Social Security replacement will drop to 30 percent by 2030.

  • Although 401(k)s have allowed workers to save significant amounts for retirement, the typical worker reaching retirement would have saved only $60,000 in 401k and IRA accounts, which translates into less than $400 per month in retirement. This retirement 401k calculator shows you how much money you can potentially save in taxes by participating in a 401k.
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  • It's too difficult to save enough for retirement. Yet, if workers consistently set aside 6 percent of their wages in a 401(k) (coupled with a 3 percent employer match), invest prudently, and leave the money alone, they should have saved enough for retirement. The Millionaire-Maker Calculator shows just how you can save a million dollars for retirement.

  • It’s believed people can rely on the equity in their house to finance their retirement. However, retirees need somewhere to live, so they can tap only a portion of their house's value using a reverse mortgage — less than 50 percent of the equity at current interest rates and less if rates rise from today's low levels.
Given the trends in retirement income, people will have to work until they drop. But, working to age 67 — and not drawing income from Social Security or 401(k)s until then — would allow most people to have a secure retirement.

Investing and Retirement Planning: Certificates of deposit are one of the safest forms of saving money for the long term. Use this Bank CD Calculator to visually show you the long term return on investment you can expect based upon current bank CD rates. In addition, retirees and users planning for retirement can take advantage of our 401k Calculator.

Every investor has different trading styles and investment preferences. Before you open a Broker Account, compare brokerage firms, account minimums, trade fees and more at Calculatorplus.com




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