Everyone who earns income has to pay into Social Security in the United States, but it is important to understand that this is not something that is necessarily going to entitle you to a comfortable retirement. The monthly benefit that you receive is probably going to be relatively modest, and if you are not doing anything to feather your own nest you may find that you will never be able to retire.
Exactly how much you will be receiving is going to depend on your contributions into the program. The Social Security Administration calculates your benefit based on the 35 years during which you earned the most amount of money.
If you are a top-end income earner, the entirety of your earnings may not be taxable for Social Security purposes. There is a maximum taxable amount, and it varies year-by-year. For 2012 this amount is $110,100; this is an increase over the 2011 figure of $106,800.
As far as the maximum annual Social Security benefit goes, in 2011 it was $37,680, but it has been raised to $38,880 for 2012.
The above may sound like a significant amount of money to some people, but you have to remember that everything is relative. If you are used to making over six figures per year the maximum Social Security benefit is probably not going to sustain the lifestyle that you have grown accustomed to.
To be optimally prepared for your golden years you need to stick to an intelligently conceived long-term financial plan. If you are not already traversing a path that leads to a comfortable retirement, right now would be a good time to pick up the phone to arrange for a consultation with a good Central New Jersey financial planning attorney.
Latest posts by Alan Augulis, Estate Planning Attorney (see all)
- Trust Administration 101 for the First-Time Trustee - August 23, 2018
- Do I Need a Medicaid Planning Attorney? - June 11, 2018
- Can an Incapacity Planning Attorney Help Me Plan for the Possibility of Alzheimer’s? - May 1, 2018