If you know much about generations, you may know that the baby boom generation encompasses those born between 1946 and 1964. If you were born in 1964 and you're among the last of the baby boomers, you're around 60 years old and in two years, at age 62, you'll reach the earliest age at which you can claim your Social Security benefits.
How much can you expect to collect from Social Security? Well, know that the average monthly Social Security retirement benefit was $1,920 as of August, amounting to about $23,000 annually. If that doesn't seem like much, here's a bit of a shocker: Back in 1964, the average benefit was a mere $77.57 per month.
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It's no secret that inflation eats away at the purchasing power of our dollars over time. So $77.57 back in 1964 would have been a relatively significant sum. Call up an inflation calculator online and you'll learn that something that cost $1 in 1964 would cost, on average, $10.15 today. Fortunately, Social Security benefits get nearly annual cost of living adjustments (COLAs).
Here are more things to know:
- Your own Social Security benefit may be higher than $1,920 -- if your earnings have been above average. Set up a my Social Security account and you can see estimates of your future benefits.
- There are multiple ways to increase your benefits if you're still working and haven't claimed them yet.
- When you claim your Social Security benefits affects their size. Consider delaying claiming until age 70, if you can. For most people, age 70 is the best age at which to claim benefits, in order to maximize them.
- It's important to factor inflation into your retirement plan, expecting to need more in tomorrow's dollars than you would in today's dollars. (Over long periods, inflation has averaged roughly 3%.)
The more you learn now about retirement topics can help you enter your golden years prepared -- and with a nest egg sufficient to sustain you.
