If you’re approaching retirement, you’re probably starting to think about Social Security. It’s a valuable program that plays a large role in most retirees’ financial picture. It will likely be an important resource for you. But how much do you actually know about Social Security?
Below are a few interesting facts about the Social Security program. As you approach retirement, take time to research your Social Security options so you can make an informed decision about your benefits.
Nearly every American over 65 receives Social Security income. According to the Social Security Administration, 9 out of 10 retirees rely on Social Security for income. It also provides income to more than 10 million disabled workers and 6 million survivors.1
Many retirees rely heavily on Social Security for income. Nearly a third of all retiree income comes from Social Security benefits. Almost half of all retired married couples and 71 percent of single retirees rely on Social Security for more than half of their income.1
Today’s retirees are living longer than past generations. Social Security started paying regular monthly benefits to retirees in 1940. At that time, a 65-year-old could expect to live for another 14 years. Today a 65-year-old is expected to live an additional 20 years. The number of retirees over age 65 is expected to increase from 49 million today to more than 79 million by 2035.1
Social Security provides increases to match inflation. Social Security offers cost-of-living adjustments (COLAs) to help retirees keep up with inflation. However, the adjustment isn’t guaranteed and may not happen every year. In 2017 the increase was 2 percent. In 2016 it was 0.3 percent. There was no increase at all in 2015.2
Social Security COLAs may not accurately reflect health care costs. Social Security COLAs are based on the consumer price index (CPI). However, the CPI doesn’t account for the fact that seniors spend more on health care than the overall population. Thus, the CPI may not weigh medical costs in a way that’s reflective of retirees’ true costs. The result is that Social Security COLAs haven’t kept up with health care inflation in 33 of the past 35 years.3
There’s a maximum Social Security benefit. The maximum Social Security benefit is currently $2,687 per month, but it’s adjusted regularly based on inflation. You probably don’t need to worry about the cap, though. The average benefit amount is just over $1,300 per month.3
You can file for benefits as early as age 62. Many people choose to file for benefits as soon as they’re eligible. If you file before your full retirement age (FRA), however, you could see a permanent reduction in your monthly benefit. Most people reach their FRA between their 66th and 67th birthdays. If you file before your FRA, your benefit will be reduced, perhaps as much as 35 percent.4
You can increase your benefits by delaying your filing past your FRA. You may wonder why anyone would delay Social Security benefits. The main reason is because Social Security offers an 8 percent benefit credit for each year past your FRA that you delay your filing. The latest you can delay your filing is age 70. If your FRA is 66 and you wait until age 70, your benefit could increase as much as 32 percent.5
Social Security deficits will begin in 2020. We’re only a few years away from Social Security starting to run annual deficits. That means the program will pay out more in benefits than it brings in through payroll taxes. Without changes, the Social Security trust fund will be completely depleted by 2034.6
But that doesn’t mean Social Security will be gone anytime soon. It’s possible that Social Security could last to 2090 even if the trust fund is depleted in 2034. However, doing so may require a 21 percent cut in benefits across the board.
Ready to plan your Social Security strategy? Let’s talk about it. Contact us today at Carstens Financial Group. We can help you analyze your needs and develop a plan. Let’s connect soon and start the conversation.
Licensed Insurance Professional. This information is designed to provide a general overview with regard to the subject matter covered and is not state specific. The authors, publisher and host are not providing legal, accounting or specific advice for your situation. By providing your information, you give consent to be contacted about the possible sale of an insurance or annuity product. This information has been provided by a Licensed Insurance Professional and does not necessarily represent the views of the presenting insurance professional. The statements and opinions expressed are those of the author and are subject to change at any time. All information is believed to be from reliable sources; however, presenting insurance professional makes no representation as to its completeness or accuracy. This material has been prepared for informational and educational purposes only. It is not intended to provide, and should not be relied upon for, accounting, legal, tax or investment advice. This information has been provided by a Licensed Insurance Professional and is not sponsored or endorsed by the Social Security Administration or any government agency.
The material is not intended to be legal or tax advice. The insurance agent can provide information, but not advice related to social security benefits. Clients should seek guidance from the Social Security Administration regarding their particular situation. The insurance agent may be able to identify potential retirement income gaps and may introduce insurance products, such as an annuity, as a potential solution. Social Security benefit payout rates can and will change at the sole discretion of the Social Security Administration. For more information, please consult a local Social Security Administration office, or visit www.ssa.gov
17846 – 2018/7/30
Are you self-employed? Or do you own your own business? If so, you likely have a lot of challenges on your plate. You have to provide great service to your customers, prospect for new customers and manage your company’s cash flow. You also may have to manage your employees, develop new products and services and work to achieve your long-term goals. As a business owner, you probably wear many different hats.
Retirement may be one challenge that isn’t on your radar. Many business owners assume they can work as long as they want. They funnel their energy and resources into their business rather than plan for the future.
However, retirement is too important to ignore. You may not be able to work forever, and you may not be able to sell your business to fund your retirement. It’s always helpful to have assets set aside for retirement. Also, a business retirement plan may be a helpful tool to attract new employees.
According to the U.S. Department of Health and Human Services, most seniors will require long-term care at some point in their lives. The department estimates that today’s 65-year-olds have a 70 percent chance of needing long-term care at some point.1 As you might guess, long-term care can be costly and financially challenging. Without a plan in place, you could struggle to pay for the care you need.
Long-term care insurance is one tool you may want to consider to minimize the financial impact. You pay premiums to an insurer. Then, when you need care in the future, the insurer pays some or all of your long-term care costs. Policies can vary greatly in terms of cost and coverage. You may find the options overwhelming.
If you understand the parts of long-term care insurance, however, you can better analyze your choices. Below are descriptions of a few key components of every long-term care policy. A financial professional can also help you find the right policy for you.
ARNOLDS PARK, Iowa (July 9, 2018) – As an extension to his commitment to service and placing the needs, goals and desires of others first, Carstens Financial Group is proud to announce the return of the fourth-annual Carstens Financial Group Charity Pro-Am.
This year’s Pro-Am, benefitting the Wounded Warrior Project (WWP), will be held August 6 and August 7, at Emerald Hills Gold Club in Arnolds Park. The Pro-Am will feature professional golfers from The Dakota Tour, a 19-event professional golf tour played in the Midwest states of Minnesota, Iowa, Nebraska, Wyoming and North and South Dakota. Players will be paired with up to 80 amateurs during the Pro-Am.
Retirement income that’s guaranteed for life can be a valuable resource. It provides you with financial certainty so you can make informed spending decisions. Guaranteed income isn’t impacted by market volatility, which could reduce your anxiety about the future. Best of all, you can’t outlive guaranteed income, so there’s no risk of running out of money in the later years of retirement.
Unfortunately, guaranteed retirement income isn’t as common as it used to be. Most retirees can count on Social Security benefits, which are guaranteed for life. For most people, however, Social Security is likely to be insufficient to fund a full retirement. Pensions are also disappearing from employer benefit offerings. Many retirees will likely have to rely on withdrawals from savings to pay for their retirement expenses.
However, you have the option to create your own stream of guaranteed lifetime income by using an annuity, specifically something called a single premium immediate annuity (SPIA). A SPIA is an insurance policy in which you convert a lump sum of assets into an income stream that lasts for a specified period of time, usually life. SPIAs aren’t right for everyone, but they can be helpful tools for some retirees.
For many, self-employment is a dream come true. You get to set your own schedule and make your own rules, and you may even get to do something you love for a living. If you’re like most entrepreneurs, your self-employment is the result of years of hard work and planning.
While self-employment may be fulfilling, it can also create unique challenges, especially when it comes to retirement planning. You don’t get the benefit of an employer 401(k) or pension. You may face tough decisions about whether to save for retirement or reinvest in your business. You may face cash flow challenges that make it difficult to save.
The good news is, as a self-employed individual, you have options that aren’t available for traditional employees. In fact, you may be able to put large sums away on a tax-advantaged basis each year. Below are a few popular vehicles you can use to save for retirement:
Is retirement on the horizon? Worried that you don’t have enough money saved? You have company. According to a Gallup survey, more than 50 percent of Americans are worried about not having enough money for retirement. In fact, retirement is Americans’ top financial concern.1
Those concerns may be justified, especially for baby boomers. Research from the Transamerica Center for Retirement Studies found that baby boomers have a median retirement savings balance of $147,000.2 That may be a sizable amount of money, but it’s unlikely to be enough to fund a long retirement.
The good news is that you can still get your retirement back on track, but you may need to act quickly. If you don’t have a catch-up plan in place, now is the time to develop and implement one. A financial professional can help you create your strategy.
Saving for retirement is a difficult task for most Americans. You probably have pressing financial concerns that feel more urgent than saving for the future. For example, you may be struggling with debt or paying for your child’s education.
You may feel like you have plenty of time to save, but the truth is that the earlier you start saving, the easier it will be to hit your objectives. Time is a valuable asset when it comes to retirement planning. If you start saving early, you give your assets plenty of time to grow and compound, which could help you accumulate more money.
Below are a few tips to help you boost your retirement savings. If you haven’t started yet, or if you feel like you’re behind, now is the time to take action and increase your savings. A financial professional can help you create a plan.
Did you just turn 50? Or are you within 10 to 15 years of retirement? If so, you may already be dreaming about your future life after you leave the working world. While it may be easy to plan vacations and think about your free time after you retire, this is also a good time to implement the final steps in your financial planning.
Below are a few action items to consider as you approach retirement. If you haven’t developed a retirement strategy, now may be the time to do so. A financial professional can help you fill the gaps in your planning so you can enter retirement with confidence.
Are you approaching retirement and worried that you’re behind on your savings? You have company. A recent report from the Insured Retirement Institute found that 40 percent of baby boomers have no retirement savings. Nearly 70 percent have no pension or defined benefit plan. And almost 60 percent have less than $250,000 in retirement savings.1
Saving for retirement is always a challenge. You have other expenses and financial needs that may seem more pressing. You may be struggling with debt, or you could be paying for your child’s education. You may feel that those items are more important than retirement.
If you’re approaching retirement, however, you may not have much time left to save. Now may be your last, best opportunity to take action and close your savings gap. Below are three tips to help you get started. You also may want to meet with a financial professional to help you develop and implement a catch-up plan.
Carstens Financial Group focuses on providing comprehensive asset management, estate planning and life insurance solutions. Allow us to help you secure your financial future.