A lot of people end up relying very heavily on social security as a main source of income when they retire, but they find out quickly it isn’t always as much as they’d hoped.
Seniors received a 5.9% increase in COLA for 2022, but with the rise of Medicare along with the inflation that continues to increase, it’s not much.
If seniors budget well enough, that could cover their expenses, but it won’t be enough for many.
With that being said, it’s important to plan ahead and if it can be avoided, to not only rely on social security checks to get by.
One way to avoid this in the long run is to take advantage of an IRA or 401k plan. With traditional plans, you can deposit untaxed dollars that you pay the taxes on when you withdraw after it’s grown.
With Roth plans, you don’t get a tax break when depositing but you will on your gains and withdrawals.
By starting a retirement plan and putting money away every month to let it grow for years, it’s a great way to rely on something other than just social security.
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