New Change for Middle-Class Retirees in the US – Their Average Social Security Check Will Increase Starting This Date

The Social Security payout system is complicated and challenging to understand. When it comes to the amount of benefits they will receive, most people close their eyes and hope for the best, but this is a bad strategy if you want to properly prepare your future. Those who depend on benefits to support themselves after quitting the workforce must carefully consider their options because benefits are not meant to take the place of earning.

The average 55-year-old earning that amount today and intending to take Social Security at age 62 would receive an estimated monthly benefit of about $1,869, given that the median household income in 2022 was $74,580 and the national middle-class income range is between $49,271 and $147,828 according to U.S. Census Bureau data. This amounts to $22,428 annually.

Relying only on Social Security would not be enough to maintain a good standard of living in most parts of the country, especially since the U.S. Department of Health and Human Services has set the 2024 poverty line at $15,060 for one person. However, it sounds fantastic if the retiree has other savings.

For those who can afford to plan ahead and are still employed, there are still ways to boost your Social Security income.

Delay claiming Social Security benefits

Early retirement can quickly become a nightmare, even though it may seem like a dream. It is not a good idea for most people to retire and start receiving benefits at age 62 (or earlier).

Medicare leads in lesser benefits and, more likely, higher medical costs because it starts at age 65. The best results will come from delaying benefits until you are 70, so either boost your retirement funds and assets or choose a less taxing but still lucrative career.

Explore other investments and savings vehicles

Along the same lines, think about diversifying your investments and maybe taking a gamble with some cash that you’re prepared to lose. Optimizing Social Security benefits is important, but considering their limitations, it should be a component of a well-rounded retirement plan. Retirees from the middle class may consider adding investments, rental income, and part-time employment to their benefits.

Consider the tax consequences

Those who only get Social Security benefits and have no other income are exempt from taxes, but since this is not the goal, some of your payments will undoubtedly be subject to federal taxes.

You can avoid unpleasant surprises later on if you understand how other income sources, such pensions or investment withdrawals, impact the taxability of your benefits. If you arrange your withdrawals carefully, it might also help you lower your tax obligation.

Investing

These days, investing is not limited to the stock market; real estate has always been a great place to put your money, particularly if you want to diversify your asset portfolio.

Although not everyone would enjoy being a landlord, you may always rent through an agency if you would rather sit back and watch the property appreciate than take advantage of the passive income. They take the most of the hassle out of the transaction, but they will charge a commission.

Saving

Keep your savings accounts in mind. Investing is fun, but you can’t access the money when you need it. However, if you have some cash on hand in a high-yield investment account, you can release it more easily if you need it. There won’t be any more taxes or chores to finish, but there will still be a waiting period.

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