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.  

 It looks like the Republicans are going to pass major tax legislation and today Senator Marco Rubio admitted they will have to cut Social Security and Medicare to  help fill in the gap (article here).  So for anyone who  thinks that Social Security was going support them in retirement is looking at a dismal future. The maximum amount you can receive even before these cuts will barely  cover the cost of rent today in many places in California let alone all of the other items you will need in retirement like food,  medicine, doctors appointments etc. 

Now is the time to tighten your belt straps and save some money to buy a 2-4 unit property. As I have said may times on this site...one 2-4 unit building will save your life when you are older. All you need to save is 3.5% for the down payment. You can get a credit that will pay for your closing costs from the lender by taking a slightly higher rate. The 3.5% can also be a gift from parents or another family member if you don't have the cash. There is no reason not to do this  sooner rather than later if you do not own a property yet.

The beauty of a 2-4 unit property is that the tenants will pay for a good portion of your mortgage every month. Then when the building is paid off in 20-30 years you will have a free place to live and also income from the other units.  You will not have this if you plan on relying on Social Security.  You won't have much if you plan on relying on Social Security. And after they get done with their cuts  you might not have anything.

Better to be safe not sorry. So what do ya say? Let's put down the Starbucks,  put away the credit cards and  start making plans to be rich in real estate.