Baby boomers anticipate that 47% of pre-retirement earnings will be replaced by Social Security, according to results of an annual survey from the Nationwide Retirement Institute. But the reality for someone making what the Social Security Administration considers the average wage in recent years, about $60,000, is more like 37%, according to the Committee for a Responsible Federal Budget. And the percentage drops as household income rises.
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I’m a good ways away from retirement (unfortunately), but I’ve always run my retirement scenarios with no SS included in my math.
I think it’ll still be there in some capacity in 20-30 years, but I have no idea what it’ll look like, so it’s easier to plan without it and be better off if it is impactful in the future.
I would guess that most Americans do not know that Social Security payments are considered taxable income. If you take out money from pretax retirement accounts and/or get a pension from your work, that plus SS payments could push you into paying income tax.in retirement.