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Why Social Security Is So Important for Low-Income Workers

Social Security will be the primary means of support for millions of workers after they retire. But it's especially critical for low-income workers, as Social Security can replace a huge portion of their pre-retirement income.

In the following video, Dan Caplinger, The Motley Fool's director of investment planning, goes through a typical situation for low-income workers. Using Social Security's benefits calculator, he notes that a 62-year-old worker making $15,000 a year can expect to replace between half and 85% of pre-tax earnings with Social Security benefits, depending on when the worker starts taking benefits. Dan runs through how Social Security calculates benefits, noting that the program is weighted toward giving low-income workers proportionally more of their pre-retirement income back. Dan concludes with comments about how the minimum wage controversy dovetails with Social Security, as Wal-Mart (NYSE: WMT  ) and Target (NYSE: TGT  ) as well as restaurant chains Yum! Brands  (NYSE: YUM  ) and McDonald's (NYSE: MCD  ) deal with fallout over their wage policies.

Learn more about Social Security
Get more information about how stretch your benefits even further by reading our brand-new free report, "Make Social Security Work Harder For You." Inside, our retirement experts give their insight on making the key decisions that will help ensure a more comfortable retirement for you and your family. Click here to get your copy today.


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Dan Caplinger
TMFGalagan

Dan Caplinger has been a contract writer for the Motley Fool since 2006. As the Fool's Director of Investment Planning, Dan oversees much of the personal-finance and investment-planning content published daily on Fool.com. With a background as an estate-planning attorney and independent financial consultant, Dan's articles are based on more than 20 years of experience from all angles of the financial world.

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Related Tickers

9/2/2014 12:59 PM
MCD $92.75 Down -0.97 -1.03%
McDonald's CAPS Rating: ***
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Target CAPS Rating: ***
WMT $75.56 Up +0.06 +0.08%
Wal-Mart Stores CAPS Rating: ***
YUM $70.85 Down -1.59 -2.19%
Yum! Brands CAPS Rating: ****

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