Types of Retirement Plans Every Senior Should Know About

Financial plans for retiring adults provide an effective means of managing finances and setting aside funds for the future, helping to alleviate stress-inducing financial worries that could jeopardize sleep quality and health. Here are a few of the most popular types to consider.

Social Security

Social Security is a program that provides retired workers with monthly checks to help cover living expenses after retiring and also offers benefits for disabled workers, their families, and survivors. More than 66 million people receive benefits from this system; retirees rely heavily on Social Security checks as the majority also get Medicare. Sadly, though, Social Security programs are under immense strain as more baby boomers retire each year, and increasing demand for these services strains the system even further.

 

Though Social Security may be controversial, most Americans agree it should not be cut. One proposal being floated involves raising the age of retirement to reduce benefits - this measure has drawn opposition from both Democrats and Republicans, though raising it would most hurt poorer individuals while jeopardizing its financial sustainability.

 

Social Security benefits go beyond monthly benefits; they also offer cost-of-living adjustments to help preserve the value of pensions, disability insurance, and health care coverage as well as other advantages. Most of its provisions are intended to be actuarially neutral; meaning if someone retires early or later they should still enjoy roughly equivalent lifetime benefits from Social Security.

 

Many individuals finance their retirement with money from investments like real estate and stocks or government transfers like welfare or Social Security Disability Insurance benefits (SSI), yet these income sources do not appear in replacement rate calculations, underestimating pre-retirement earnings while overstating poverty levels.