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Social security can increase your retirement savings, here's how



As Americans across the country face a savings crisis, it helps to get a plan to retire comfortably.

On average, about half of Americans may experience a shortage that covers necessary retirement expenses, according to Fidelity Investments.

"It's a challenge for many Americans," said Keith Bernhardt, vice president of retirement income at Fidelity Investments, for FOX Business.

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In general, Bernhardt recommends that people spend 1

5 percent of their earnings each year in pension savings to get enough to continue their lifestyle in retirement.

Stashing money in a 401 (k) or other employer sponsorship plan can help, especially when it is an employer struggle. It will be accounted for in a 15 per cent saving target. The grant limit for 401 (k) plans in 2019 is $ 19,000. People over the age of 50 can stop an additional $ 6,000 in so-called catch-up contributions.

For the IRA, the contribution limit is $ 6,000.

Health Savings Account (HSAs) is another useful tool. An HSA is an account where a person contributes the pretax dollar for the explicit purpose of using these funds for future medical expenses. HSAs can be used to cover everything from dental, vision and prescription amounts to Medicare prizes.

Furthermore, social security is a "very important factor that should come into play," Bernhardt said.

However, many have quite serious misunderstandings about the program, which was designed only to supplement pension savings – not replace them. As previously reported by FOX Business, one-in-four Americans believe they will be able to live on social security alone. Others believe that if they claim their benefit at the age of 62, it will actually increase over the years.

Misconceptions can lead people to make poorly informed decisions. Some people require benefits early, for example, because they think the program is "brought" while others make it based on hearsay or advice from family and friends.

"One of the most powerful things people can do is to delay taking Social Security," says Bernhardt. "Every year you delay that you increase your payout by about 8 percent annually. It can make a very big difference in your life. "The reduction of benefits for those claiming 62 is 25 percent, 20 percent for those claiming 63, 13.3 percent by age 64 and 6.7 percent by age 65. That means it may be worthwhile Stay in the Workforce A Few Extra Years

People may have concerns because the Social Fund's reserve fund is expected to be exhausted by 2035, according to the annual Social Security and Medicare Trustees report, at which time about 80 percent of benefits will be paid.

But for today's workers, Bernhardt says that Social Security is something people can trust, even if the program has changed or adjusted.

"It's a very important part of the Americans economy, I think it's reasonable to expect It will take quite a bit of time, "he said.

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Working with a financial advisor has proven to help. Those who worked with an expert got 15 Percentage greater lifespan. Income benefits for social security $ 1.551 per month against $ 1.324.

It is also important to note that if you recently filed but think you made a mistake, you can reverse the decision within 12 months. To do so, you pay all your money back in a lump sum, suspend your account, and it will continue to grow until you are ready to submit benefits in the future.


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