Personal Finance

You're probably concerned with your IRA / 401(k), but have you thought about Social Security benefits? You should be. Social Security benefits comprise approx. 50% of retirement income for over 50% of married couples in retirement, and on average well over 20% of income for high earners. What's more important this part of your retirement income is the only part guaranteed for the rest of your life.

The exact amount you will get is very hard to calculate, it depends on the number of years worked, time of your going into retirement and whether you work when retired. The most crucial thing is that you actually can rely on the system, despite all the media talk. even without change current taxes will cover pensions up till 2016, and then pensions can be further funded by selling Treasury bonds up till somewhere around 2040. Obviously nobody wants to see that coming, so very probably the policymakers will sooner rather than later come up with a serious reform (raise taxes, unfortunately) to make the system self-sustainable.

But back to my previous thought: how much will you actualy get per month? Well, there's a really complicated formula to calculate the exact amount, but there are a few highlights:
1. If you retire earlier than normal (65 or 67), your benefit will be cut
2. If your spouses retirement benefit is more than 2-fold of yours you may qualify for the bigger amount (so you can choose between your normal benefit and your spouse's 50%)