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How to Estimate Your Social Security Benefits

Whether you’re getting close to retirement or planning for the future, you can estimate your Social Security benefits.

The estimator gives you an idea of what your monthly Social Security benefits would be, based on your current record of Social Security earnings. Your actual benefit amount cannot be determined until you apply for benefits. 

As you plan for your retirement, keep in mind that you’ll need 70-90 percent of your pre-retirement earnings to maintain your standard of living when you stop working. Social Security benefits will only make up a part of this percentage and should be supplemented by a pension, savings, and/or investments. Check out 10 Ways to Prepare for Retirement.

Now is the Time to Plan for Retirement

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Day in and day out, we go to work, pay the bills, take care of the kids, and manage all of the other demands of daily living. Considering all these responsibilities and that the average American works 91,520 hours in their lifetime, it’s understandable that a comfortable retirement remains the American dream.

With emerging challenges and obstacles making a secure retirement seem more difficult to attain, it’s more important than ever to take the time to think about long-term financial needs so that our retirement dreams can become a reality.

Understandably, the process may seem complex and time consuming. Fortunately help is here.

National Retirement Planning Week, a nationwide effort to remind Americans of the necessity to consider their financial needs in retirement, takes place this week. Let National Retirement Planning Week be the motivation you need to set aside the time, roll up your sleeves and create a comprehensive retirement plan.

Why plan?

Let’s consider the facts. The retirement boom is underway. Approximately 79 million Baby Boomers will reach retirement age by 2030, with approximately 10,000 Boomers turning 65 every single day. For many, the challenges during retirement will be more complex than those facing prior generations.

During the last two decades many employers stopped providing traditional pensions. According to the Bureau of Labor Statistics, only 19 percent of workers in 2012 had access to a defined benefit. Instead, most employers now offer defined contribution plans, such as 401(k) plans. In the process of shifting to these plans, greater risk has been transferred to individual workers.

At the same time, we have seen vast growth in the cost of health care. In fact, the latest research from the Insured Retirement Institute shows that a healthy 65-year-old female will spend on average at least $417,000 on cumulative health care expenses including premiums during her retirement years.

Her male counterpart will pay in excess of $369,000. Life spans also continue to increase, and so future retirees will need to have additional retirement assets to pay for basic expenses—for a longer period of time—in retirement.

The Unknowns

And then there are the unknowns. One potent unknown is the future rate of inflation. A period of high inflation has the potential to increase the cost of expenses in retirement and erode the purchasing power of savings.

And there’s investment risk. Without access to a fortuneteller’s crystal ball, it’s virtually impossible to predict the performance of financial markets.

Creating a Retirement Plan

Intimidated yet? The challenges may seem vast, but they can be manageable so long as you are prepared. A solid retirement plan will help protect against foreseeable risks and hedge against the unknown variables.

If you are having trouble getting started, assistance from a financial professional is only a phone call away. There also are a number of resources available on the Internet to help as you think about your retirement needs.

The National Retirement Planning Coalition, organizer of National Retirement Planning Week, maintains an educational website— www.retireonyourterms.org— offering resources to help Americans stay focused on long-term financial goals.

One last thought—new research shows that Americans who have the highest levels of confidence in attaining a financially secure retirement are working with a financial advisor and have developed a targeted savings goal. So don’t delay and start planning today.

Use the resources available, set a goal, make a plan, save, and seek help from financial professionals when you need it. Now is the time to think about your retirement needs.

Use National Retirement Planning Week as the nudge needed to make the commitment to set aside time from your hectic day-to-day routine and put together a plan for a financially secure retirement. With a solid plan in place, your secure retirement dream could be on the horizon.

A free iPhone app called TSP Funds is currently being offered through the Apple store. It asks Thrift Savings Plan (TSP) participants for their account log in information.

This is not an official TSP app and the TSP does not recommend using this app to access your TSP account. Providing your information could result in a security risk to your account.

If you would like to access your TSP account, please log in directly at TSP.gov.

The IRA contribution limits were increased for 2013. Find out what the new maximum contribution is.

According to the Pension Benefit Guaranty Corporation more than 38,000 people haven’t claimed pension money they are owed, ranging in amounts from 12 cents to $1 million.

Find out if you’re owed pension money and learn about the process to get your benefits.

Find out if there is other money the government owes you.