Retiring soon? Think you can afford it – no? Don’t worry – millions of citizens in the United States of America are in the same situation and rely on some form or another off of Social Security benefits for retirement. however, such income is not meant to be a full retirement package. It is meant to be supplemented with other income or to supplement other income and help one live easier in retirement. Especially in the times of COVID-19 and soaring high inflation rates it is paramount to know how to supplement your Social Security Income.
In this light, it is very important to save for retirement before you enter it. According to the Motley Fool – a general rule is that your quality of life will not change if you still receive 80% of the income you receive whilst working. Whilst the Motley Fool makes it clear that Social Security Benefits account for about 40% of your earnings set aside for retirement, this leaves 40% of your monthly earnings to be made up for. There is a formula that the Motley Fool made evident on their website – and it goes as follows: Take your Social Benefit you get per month – work it out two a year (multiply it by 12) and then divide it by 4% or 0.04 to calculate how large your savings portfolio should be. Try this is pretty interesting! So, for example – if you are to receive $1,565 in Social Security Income per month, multiply this by 12. This gives you – $18,780. Now divide this by 0.04, giving you your desired savings retirement or portfolio balance of $469 500.
Life these days is expensive – and not everybody on Social Security benefits can afford it – they might not have a retirement portfolio like mentioned above to help supplement their Social Security benefits. With extremely high inflation and one of the greatest increases in COLA in history as well as soaring high inflation that eclipses this figure – retirees might need to supplement income. Furthermore, no further stimulus checks despite pressure from the Senior Citizens League and millions of Americans in the United States of America and abroad to continue the stimulus payments, look to be issued at present this year. For this reason, it might be necessary for you to do part-time work from home to help you live whilst receiving social security benefits. Work that a retiree can do can include writing, teaching English – data capturing or Gig work for Fiverr or Upwork – that is according to the Motley fool. The advantage of gig work is you can choose the contracts and hours.
A Passive/ Residual Income
Lastly, another good way to supplement your social security benefits or to help you in retirement is to earn a residual or passive income from property, business, or investments. Not everybody, however, has these resources or can afford this, yet according to the Motley fool with the advent of the online website such as Airbnb or Just Park you can rent out a room, or property as well as a garage, respectively and supplement your social security income or benefits by making residual income.