When I say "forget about social security", I am not talking about the very real possibility of it not being around for the younger generation.  What I am talking about is how your Social Security Benefits should be an afterthought and not your primary thought.  Here is why:  "Social Security was never intended to be your only source of income when you retire or become disabled or your family's only income when you die. It is intended to supplement your savings, investments, pensions, and insurance plans."  If you do not believe this statement then just think about the math behind it.

The maximum amount someone could receive at normal retirement age is $2,639 per month.  Normal retirement age is 67 for anyone born after 1959.  Of course, you could work until age 70 and receive a delayed retirement credit which would increase your max to $3,576 per month.  The increase would give you an additional yearly increase of $11,244.  All of this would provide a maximum annual income through Social Security in the amount of $42,912.  One of the problems is the average person starts to receive Social Security benefits at age 64.

Let's assume you love to work and will patiently wait until age 67 to retire.  We will also assume that your average income qualifies you for the maximum at $2,639.  The yearly income benefit would total $31,668.  Does this seem like enough to live on for the rest of your life?  We have not even begun to talk about increased medical expenses as you age.

Not only is $31,668 not enough to live off of.  It is also taxed.  You heard that right, taxed.  If you are single and make above $34,000 a year, up to 85% is taxable.  Married filed jointly is taxed up to 85% when making $44,000 and above.  Being taxed is no reason to not want to have more income in retirement.  You should/need more and need to plan for it.

There is no better time to think about retirement than when you are young.  More time equals more of an opportunity to make it a reality.  To start, when you determine how much you will need in retirement do not include Social Security Income.  Social Security should be thought of as a bonus but not as something you are reliant on.  Would you give up your yearly salary for your bonus?

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