How does Social Security actually work? Do you know? Are you going to rely on Social Security for a significant amount of your retirement income?
If so, dont’ you think it would be a good idea to understand how Social Security works?
In this video we’re going to show you just that.
So, first, let me ask you. Is it better to have earned $10556 in 1978 or $48,642 today when it comes to your Social Security payment?
They’re the SAME THING! Social Security indexes (inflates) previous years income based on a standard average income for any given year. Thus, a $10,556 salary in 1978 gets an indexed rate of 4.608 which is equivalent to you making $48,642 this year.
What does that mean exactly? Simple. If you are looking at your statement and seeing this pittance of salary numbers reported from many years past, don’t fret. It’s going to be much better than you realize once the indexing is factored.
I don’t think they actually show you the indexing on your statement either. Only the actual, REAL dollars they taxed you on. Thus your statement can be very, very misleading.
And that’s too bad, because that lack of correct information could lead people to work longer just to “increase” their benefits when in fact tney aren’t really increasing their benefits by that much, if at all.
Here we share with you 3 scenarios. 1. you stop working after 20 years averaging $48k of taxable income.
2. You stop working 25 years of $48k of taxable income.
3. You stop working after 25 years of $48k income and the last 5 years of $100k income.
What do you think the difference in Social Security benefits will be???
Trust me, it’s not what you think. But you’ve gotta watch the video to find out! 🙂