Finance Expert Warns Americans on Social Security

While nearly all Americans recognize that retirement means the start of receiving Social Security benefits, understanding how to maximize those benefits and ensure long-term financial stability is less common. Jean Chatzky, former financial editor for NBC’s Today show and current American Association of Retired Persons (AARP) ambassador, offers clear guidance for Americans approaching retirement. She emphasizes the importance of strategic timing, supplemental savings and managing debt, especially in light of growing concerns over Social Security’s long-term viability.

Social Security Alone Might Not Be Enough

According to data from the Social Security Administration, the average monthly benefit is about $1,976, amounting to $23,712 per year. While this provides a critical safety net, it often falls short of meeting the full financial needs of retirees. The situation becomes more concerning when looking ahead — by 2033, Social Security’s trust fund is projected to run dry without new legislative measures. In that scenario, benefits could drop to around 80% of current levels, highlighting the need for additional retirement planning. As a result, Chatzky urges workers to consistently contribute to 401(k) plans and IRAs, especially when employers offer matching contributions.

The Best Age to Claim Social Security

According to experts, timing is critical when deciding when to claim benefits. Chatzky advises those who are single and expect a long life to delay claiming until around age 70 in order to maximize monthly payments. Couples should strategize together, she says, with the higher-earning partner delaying their claim if at least one spouse is in good health. This approach helps ensure higher survivor benefits down the road.

Plan to Live Until 80

In light of rising life expectancies, the financial expert recommends planning and saving for retirement with the assumption that one is going to live until at least 80 — a strategy with which many experts agree. “Although preparing for a retirement period of 15 to 20 years may introduce additional complexities, it is viewed as essential for securing long-term financial stability,” reports have explained.

The Hidden Threat to Retirement Savings

In her book Money Rules, Chatzky explains that debt, especially credit card debt, is a major barrier to retirement savings. With 115 million Americans carrying credit card balances, and the average household owing nearly $15,800, interest payments often eat away at disposable income that could otherwise go into savings. The Consumer Financial Protection Bureau (CFPB) reports that many Americans can’t afford a $2,000 emergency expense without borrowing money or selling assets, underscoring how financially fragile many households remain. Chatzky’s advice is clear: focus on your own financial reality, not the neighbors’. “Unless you’ve taken a look at the books, don’t assume to know anyone’s financial situation except your own. … Make your lifestyle and purchasing decisions based on what you can afford, not what your peers are buying, and instead of coveting thy neighbor’s car, try to feel smug about your fat retirement account, your zero credit card balances, and the car you own free and clear,” she says.

The post Finance Expert Warns Americans on Social Security appeared first on Knewz.