Many are skeptical as to whether younger workers will ever receive Social Security income. In fact, many financial planners do not even consider Social Security in their projections for retirement income streams. That is why we call it “Social Insecurity!” As a general rule, if you are in your thirties or forties, you may not want to assume that you will receive any Social Security income. If you end up receiving Social Security, count it as a bonus.

If you develop a budget without including any Social Security, you are being conservative. If the laws do change, you will be ahead of the game. If Social Security is still around as you get closer to retirement, you may have the opportunity to change your investment strategy, budget, or goals (maybe even retire earlier).

The formula for determining your Social Security benefit is similar to the formula used to determine employer-provided pension benefits. The primary differences are that Social Security income is never available in a lump sum, and as a general rule, the maximum annual amount payable is generally much smaller than the amount provided under an employer-provided pension.

If you are nearing retirement age and wish to calculate projections that include Social Security, as financial planners, our services include helping you with long-term planning and a financial plan to determine whether or not you are on course or need to save more to bolster your retirement savings.

In addition, the Social Security Administration website offers a Retirement Estimator tool that gives you an approximate amount for your Social Security payments based on your earnings record. Your actual benefit is not determined until you apply for benefits.