When it comes to Social Security, self-help guru Tony Robbins has a lot to say. In fact, Robbins had issued a stark warning to readers on his blog about this retirement benefits program. Specifically, he wants people to “get your head out of the sand,” so that you don’t make a mistake that could end up costing you your financial security as a retiree.
So, what does Robbins mean by getting your head out of the sand? Here’s what you need to know about his advice, and why it’s worth listening to.
Robbins wants you to face this harsh reality about Social Security
When advising readers to get their heads out of the sand, Robbins was specifically concerned about the fact that many people don’t really know their numbers when it comes to saving and planning for retirement. And that’s a huge problem because people may be expecting more from Social Security than they will actually end up with.
Robbins went on to explain the details about why this retirement benefits program is likely going to let people down, warning, “Social Security was never intended to become a replacement for retirement savings, especially considering the extended length of retirement we can anticipate with longer lifespans. Fifty years ago, the average retirement was 12 years. Today it’s 20-plus years. Furthermore, 49% of American households are “at risk” for not having enough money in retirement to maintain their living standards, according to theCenter for Retirement Research.”
Since you can’t live on Social Security alone, Robbins wants you to think about how much money it will cost you to maintain your lifestyle, and use that number to see how much you must save for your future.
Robbins is right — Social Security isn’t enough
Robbins is absolutely right to issue this warning to Americans about Social Security, and he’s also correct that retirement benefits are not going to be large enough to allow you to retire comfortably with too little savings.
The reality is that Social Security retirement benefits are not intended to replace your income fully, or even to be a primary source of retirement support. These benefits replace around 40% of pre-retirement income, and living on such a small percentage of your earnings as a retiree would be difficult — especially given that it is likely you will have higher healthcare costs as you age.
The suggestions that Robbins made about figuring out how much to save for retirement are smart because you do need money in your 401(k) or other investment accounts to supplement Social Security. Since most experts recommend replacing a minimum of around 80% or so of what you earned before retiring, this would mean that if you combine your investment income with your retirement benefits, you’d need your retirement plans to produce around 40% of what you were making at a minimum.
If you don’t realize this early on in your working life, and you don’t start saving regularly throughout your career, you could end up in a bad situation as a senior — so don’t let that happen. Listen to Robbins’ advice, figure out today what your Social Security benefit is likely to be — then, do the math yourself or work with a financial advisor to figure out the amount you need to save to supplement your benefits and have bring in an amount of income that’s comfortable for you.
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