Your Social Security Benefits Will Be Smaller Than You Think
If you're counting on your Social Security benefits for retirement income, you should be aware that the benefit amount listed on your Social Security statement is not reliable. Not only is that number just an estimate, but there are certain expenses that will eat into whatever Social Security benefits you end up getting.
You see, the number on your Social Security statement is the administration's best guess at what your retirement benefits will be. However, this number is often way off-base -- especially if you're still years or decades away from retiring.
Your Social Security retirement benefits are based on your income during your 35 highest-earning years of work. Lacking a crystal ball, the Social Security Administration doesn't know how much you'll be earning in future years. So in order to come up with the number on your statement, it assumes you'll earn exactly the same income that you earned last year in every year to come.
Source: Fool.com
