In Step 1, I gathered all my retirement accounts and established what pool of money I will have to be able to retire and that will be my largest bucket of money to live off of for the rest of my life. Another bucket of money that may or may not exist when I retire is social security.
If you’re not aware, you can log on to www.ssa.gov and get a FREE summary statement of benefits so you can determine how much money you are supposed to get when you retire. I say supposed to because as of today, the social security trust fund is supposed to go bankrupt in the 2030s if Congress doesn’t do something to fix it. That “something” will likely be tax increases (more on this later).
I logged on to my account and built the table below which highlights how much money I am supposed to get depending on what age I start taking benefits. Please note that every person’s benefit will be different based on how much money you contributed, how many “credits” you have and when you start taking the benefits. Note: I rounded numbers to nearest hundred.
Bonus tip: You can request a complete and certified history of your earnings and social security contributions here. There is a charge of $44 to $100 but if you want to validate the earnings it’ll be worth it especially if you think there is an error.
My Social Security Benefits
At the low end, if I start taking social security right away at 62, I will get $2600/month or $31,200/year. If I wait till 70, I can get $4700/month or $56,400/year. These assumptions assume social security is solvent when I start taking benefits which won’t be for another decade.
So putting our Steps together so far:
- Total all retirement account money
- Estimate how much social security might provide
We’ve got a few more steps to go, more on that later but I can taste the retirement. Click here for Step 3.