57% of Americans do not use this ridiculously simple retirement tool

More than 64 million Americans will receive some form of social security in 2019, according to the Social Security Administration. And among benefit recipients, almost half of married couples and about seven out of ten unmarried beneficiaries will depend on these benefits for at least 50% of their income.

In other words, social security benefits can make or break your retirement.

Now, depending on your benefits to the extent of your abilities is not necessarily a bad thing. Although you should not rely on this money as the main source of income, it is a good cushion to supplement your own retirement savings. The problem is that most people do not know how much they will receive in retirement benefits.

More

Image Source: Getty Images

<p class = "canvas-atom text-canvas Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Across the mySocialSecurity program, the Social Security Administration provides income statements to give workers an idea of ​​how much income they have earned this year and, based on this income, indicate what their monthly social security checks look like once they are old enough to start claiming benefits. However, according to a report from the Social Security Administration, only 43% of those registered online to receive these reports consulted them in 2018, which represents a dramatic decrease compared to the 96% of people who viewed their statements in 2012. This means that the 57% of people who do not check their tax returns may not know what they might receive in the future. "Data-reactid =" 26 "> Thanks to the mySocialSecurity program, the Social Security Administration provides income statements to give workers an idea of ​​how much income they have earned this year and, based on these incomes, how could look like their monthly social security checks once they are old enough to start applying for benefits, but only 43% of those who do so According to a report from the Social Security Administration – registered online to receive these returns in 2018 – This represents a dramatic decrease from the 96% of people who viewed their tax return in 2012. This means that 57% of people who do not check their tax returns may be unaware of what they might receive. benefits in the future.

If you are still in a few decades away from retirement, you may think that you do not have to worry about social security yet. But since your benefits will be at least a part of your retirement income, you need to know how much you will receive from Social Security to know how much you need to save for retirement.

Include social security in your retirement number

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Before you can start saving for retirement, you have need Enter your retirement starting number – or the total amount you would have saved when you retired.The best way to find it is to play with a retirement calculator, which will give you a rough estimate of what you might need. (Note, however, that no calculator will give you a 100% accurate answer, so try several different methods to get a range of possible numbers.) "Data-reactid =" 29 "> Before you can start saving for the In retirement, you need one goal in mind: enter your retirement number – or the total amount you would have saved when you retired.The easiest way to find it is to play with a retirement calculator that give you a rough estimate of what you might need (do not forget that no calculator will give you a 100% accurate answer, so try a few different ones to get a range of possible numbers to aim for .)

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Another quick and easy way to get a rough estimate of how much you need is to use the rule of 25. It is based on the Rule of 4%In short, you can withdraw 4% of your pension fund in the first year after retirement, and then adjust that number each year to take inflation into account. The rule of 25 therefore essentially allows you to work backwards. So, if you know that you will need about $ 50,000 a year in retirement, multiply that amount by 25 and you will need a $ 1.25 million nest egg. "Data-reactid =" 30 "> Another quick and easy way to get a 25% rule is an approximate one, based on the 4% rule which, in summary, states that you can withdraw 4% of your retirement fund the first year after your retirement, then adjust that number.Every year after, to account for inflation, the rule of 25 basically allows you to work backwards.If you know that you will need about $ 50,000 a year in retirement, multiply that amount by 25 and you will need a nest egg about $ 1.25 million.

This is a daunting figure, even for the super savers. However, this number represents only the total amount you would need to spend your retirement – it does not count for the portion of your income that will come from Social Security.

Suppose, for example, that you expect to receive about $ 1,800 per month, or $ 21,600 per year, in social security benefits. If you know that you will need about $ 50,000 a year to cover all your expenses and that the social security will cover $ 21,600, that means you will only have to record the remaining $ 28,400 a year. Multiply that number by 25 to get a new retirement number, which is about $ 710,000. Although there is still a lot of money, it is much less overwhelming than $ 1.25 million.

The story continues