The average senior on Social Security collects $1,543 a month. Granted, that average benefit is likely to rise over time as cost-of-living adjustments come into play. Still, if you’re an average earner, you’ll likely find that Social Security alone doesn’t keep up with your retirement expenses. That’s why it’s crucial to have a backup plan — outside income sources you can tap in addition to your benefits. Here are a few you may want to look at.
The more money you put into your IRA or 401(k) plan, the more financial flexibility you’ll have during your senior years. If you start funding one of these accounts from an early age, you won’t have to part with too much money on a monthly basis to amass a significant sum. Socking away $250 a month, for example, over 40 years will leave you with close to $600,000 if the investments in your retirement plan manage to generate an average 7% return, which is doable if you load up on stocks. Make it $300 a month, and you’ll be looking at almost $720,000.