This year the cost of living adjustment for social security was 2.8%, meaning social security checks went up 2.8%.
As of January 201 9 the Average Social Security Payout was $1461.
The Maximum Available Payout is $2861. - To receive the maximum available payout you would have had to have had the maximum taxable income for 35 years.
If you were to retire today would you be able to live on either of these amounts? Currently, Social Security is the dominant source of income for half of married couples and 74% of single people age 65 or older. Again the average payout is $1461 - how does that sound as your dominant source of income when you retire? How much is your rent or mortgage? At least if you own a house hopefully you will have paid off your mortgage by the time you retire but even then your social security check will probably just cover your property tax, insurance, food, utilities...the basics.
If you rent hopefully you understand that you will always need to pay rent. You can never not pay rent if you are a renter. When you own, your mortgage eventually gets paid off...rent never stops. How much has your rent gone up over the years? Most likely it will continue to climb so by the time you want to retire your rent will be substantially higher than it is now but your income will most likely be lower...how will that work out for you?
Nearly one in two Americans -- 46 percent -- die "with virtually no financial assets," or less than $10,000, according to a study by economics professors at MIT, Dartmouth and Harvard. In fact, the study found that 19 percent of Americans die with "zero" financial assets.
Expert estimates are that you need to have between 11-18 times your annual pay to retire. So if you earn $100,000 you will need between $1.1-$1.8 million in savings. Of course the longer you live and the more you spend...you might outlive your savings.
If you are like most American's you don't have anywhere near the 11-18 times your annual pay in savings. So what's the plan?
In case you didn't know you can buy a 2-4 unit property on an FHA loan for 3.5% down. You can live in one unit and rent the others. In many places in the country you can buy for 3.5% down and live for free in a 2-4 unit property. Get two of these properties and when the mortgages are paid off you will be collecting rent. Your tenants pay for your building over time and when you retire they will pay for your retirement. When your building is paid off your tenants will pay for your vacations, dinner's out, health insurance, doctor bills and the list goes on.
Remember just one 3.5% down payment is all you need to get started. Your future self is counting on you to create a comfortable life for when you are older.