It's easy to think of your 401(k) match as yours as soon as it shows up in your account, but if you're a recent hire, that might not be true. Most 401(k) plans have vesting schedules that dictate when you're allowed to keep your employer-matched funds if you leave the company.

Quitting before you're fully vested can cost you some or all of your employer match. Here's a closer look at how vesting schedules work and how to know if you're fully vested in your plan.

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How 401(k) vesting schedules work

Each company sets its own rules regarding 401(k) vesting schedules, but they're limited by what the government allows. You'll have to check with your employer to see what its rules are.

There are two main types of vesting schedules: cliff and graded. Cliff vesting schedules require you to work for the company for a certain number of years (three maximum) before you're allowed to keep any of your employer match if you leave the company. Graded vesting schedules gradually release your employer match to you over time. For example, you might get to keep 20% after one year, 40% after two years, and so on. Graded vesting schedules can stretch out over six years.

If you've worked for your employer for at least six years, you should be fully vested in its plan. If you've worked there for a shorter time, check with your employer to learn when you will become fully vested in the plan.

What to do if you're not fully vested in your 401(k) plan

Not being fully vested in your 401(k) isn't a big deal unless you plan to leave the company soon. If you're close to being fully vested, you may prefer to stick it out at your job for a bit longer so you can hold on to all of the employer-matched funds you've earned over the years.

When that's not an option, weigh what you're losing by forfeiting some of your match against what you'll gain by switching to a new position. If the salary increase for your new job is substantial, that might be worth forfeiting a few thousand dollars of your 401(k) match. That choice is up to you.

When you take your new position, make sure to inquire about your new company's vesting schedule and whether there's any waiting period before you're able to start participating in the 401(k) plan. If there is, you may need to save in an IRA in the meantime.

Once you're ready to participate in the new plan, check how much you need to contribute to get your full match, then divide that amount by the number of pay periods in the year. Do your best to claim the entire match whenever possible.

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Claiming Social Security at age 62 gives you the most checks, hands down. However, that doesn't mean it's always the best move for your finances. It can be the right decision for some people, but it's worth comparing multiple claiming ages before you decide when to sign up.

If any of the three situations below apply to you, you're probably better off waiting a little while rather than signing up as soon as you become eligible.

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1. You don't understand how your claiming age affects your checks

Claiming Social Security benefits at age 62 permanently reduces your monthly benefit. The Social Security Administration first calculates the amount you're entitled to at your full retirement age (FRA) -- 67 for most people today. Then, it adjusts it up or down based on your actual age.

Early claiming reduces your checks by 5/9 of 1% per month for up to 36 months, then by 5/12 of 1% per month thereafter. Those who apply as soon as they're eligible get 30% less than they would have if they'd waited until their FRA to sign up.

Benefits continue growing by 2/3 of 1% per month after you reach your FRA. This occurs until you qualify for your maximum benefit at 70. Most people would receive their largest lifetime benefit by waiting until 70 to sign up, though this isn't the case for those with shorter life expectancies. In that scenario, claiming at 62 could be a smart option.

2. You're still working, and you don't need the extra money right now

Claiming Social Security early and permanently shrinking your checks often doesn't make sense when you have enough other income to enable you to delay your application. Those who are still working might be especially reluctant to sign up at 62 because of the earnings test.

This is a little-known Social Security rule that withholds money from your checks if you earn more than a certain amount from your job during the year while under your FRA. The withheld funds come back to you as a one-time benefit boost at your FRA. But you'd still wind up with less this way than you'd get if you'd just delayed your application in the first place.

3. You have a short life expectancy and expect your family to be dependent on your survivor benefits

For single adults, a short life expectancy is often a reason to claim Social Security early, but for those with dependents, that could be the wrong move. Signing up early permanently reduces the survivor benefits your family will be eligible for after you've passed away.

If you expect your family to be highly dependent on these benefits, you might be better off forgoing Social Security retirement checks altogether. This will boost the amount your family is entitled to upon your death.

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Spousal Social Security benefits sound pretty straightforward on the surface: Your spouse applies for retirement benefits, then you apply for a check based on their work record. However, there are actually several little-known rules that can make this more complicated than it first appears.

Understanding how spousal benefits differ from retirement benefits can help you avoid some of the most common mistakes. Here are three that could prove costly for you if you get them wrong.

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1. Just getting married often isn't enough to qualify for spousal Social Security

Marriage is a prerequisite to claim a spousal Social Security benefit, but the length of the marriage matters more than many realize. Typically, you must have been married to your spouse for at least a year before you become eligible to claim a benefit on their work record.

There are exceptions if you're the parent of your spouse's child or if you were eligible for Social Security benefits in the month before the month you got married. Then, you'd be able to claim spousal benefits without the one-year waiting period.

2. Divorce doesn't automatically render you ineligible to claim a spousal benefit

Whether you can claim a spousal benefit following a divorce depends on how long the marriage lasted. If you were married for at least 10 years, you remain eligible to claim a benefit on your ex's work record, and you don't need their permission to do so. Those with shorter marriages will not have this option.

Seniors claiming ex-spousal benefits will lose this option if they remarry. However, they will likely be able to claim a spousal benefit on their new partner's work record instead.

3. Spousal benefits don't grow until age 70 like retirement benefits

Your Social Security retirement benefits continue to grow each month you delay your application, until you qualify for your largest checks at 70. Waiting until then is often the best strategy if you're trying to maximize your lifetime Social Security benefits.

Spousal benefits stop growing once you reach your full retirement age (FRA). This is 67 for most people today. Make sure you sign up by then at the latest if you're claiming these checks, so you don't miss out on the benefits you qualify for.

If you have any questions about how Social Security spousal benefits work, contact the Social Security Administration for more information. You can do this by phone or by making an appointment with your local Social Security office.

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Ask most workers and seniors if they're willing to accept a 22% benefit cut when Social Security's trust funds are depleted in six years, and they'll say absolutely not. Yet a surprising number of seniors choose to sign up for benefits as early as possible, even though this move can permanently reduce their checks by 30%.

For some people, early claiming genuinely makes sense. For others, it could be a costly mistake. To know which camp you fall into, you have to understand how your claiming age affects your checks and how your benefits fit into your larger financial picture.

Image source: Getty Images.

How claiming Social Security early can shrink your benefits up to 30%

No matter when you sign up, the Social Security Administration first calculates the benefit you qualify for at your full retirement age (FRA). This is 67 for most people today. Then, it adjusts this benefit up or down, depending on your age at sign-up.

Early claiming reduces your benefit by 5/9 of 1% per month for up to 36 months and 5/12 of 1% per month thereafter. That's enough to shrink your benefit by 30% if you plan to apply as soon as you turn 62.

The loss is generally permanent, although some people who lose money to the earnings test may see a one-time benefit boost once they reach their FRA. It's also possible to undo your Social Security claim within the first 12 months after sign-up, but you must repay all the money you've received so far. Rather than trying to undo your decision later, take time to think carefully about whether applying at 62 makes sense before you do it.

When you might want to apply for Social Security at age 62

Applying for Social Security at 62 can make sense in three key situations. First, if you're unable to work and don't have much in savings, your benefits could mean the difference between financial security and falling into debt. In that case, applying early is a no-brainer, even if it means settling for a smaller lifetime benefit.

You may also choose to apply early if you have a short life expectancy. This could actually get you your largest lifetime benefit. However, if you have any family members who will be dependent on your survivor benefits after you're gone, early claiming will reduce what they get once you've passed away. If that bothers you, you might choose not to receive checks at all while you're alive.

Finally, if you're married and your spouse has earned significantly more than you throughout your career, you may decide to apply for your own retirement benefit early. This could help your spouse delay until they're eligible for larger checks. Then, when they apply, you can switch to a spousal benefit if it's worth more than what you're already receiving.

If none of these things apply to you, it might be worth delaying Social Security until your FRA or beyond to maximize your lifetime benefits. Every month you wait to apply increases your checks until you qualify for your largest benefit at age 70.

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The final Social Security cost-of-living adjustment (COLA) prediction will be released on Sept. 11, 2026, as we receive the second-to-last piece of information needed for the calculation. It should give us a pretty good idea of what's coming next year, but it still won't be locked in.

A lot depends on where the August inflation report lands and how quickly expenses continue to rise throughout September. Here's what to expect from the next COLA update.

Image source: Getty Images.

The August inflation report arrives Sept. 11

Sept. 11 is the day we receive the August 2026 inflation report. This will tell us how quickly costs rose throughout August and whether inflation is increasing, decreasing, or remaining steady compared to past months.

This matters because Social Security COLAs are based on changes in average third-quarter inflation data from one year to the next. We already have the data from 2025 and July 2026. We're just waiting on the August and September numbers. On Sept. 11, with five of the six puzzle pieces in place, the COLA estimate expected from The Senior Citizens League will likely be pretty close to the real thing.

It may not be exact, though. If the August report reveals inflation rose faster than expected, for example, that could push the next COLA projection above the current 3.6% estimate. Similarly, if inflation is lower than expected, that could push the next COLA estimate down.

In either case, seniors are likely to receive a larger benefit boost in 2027 than the 2.8% increase they saw in 2026. But it's a bit of a good-news/bad-news situation. More money is always nice, but all that extra cash will go toward paying for your larger expenses rather than improving your standard of living.

The actual 2027 Social Security COLA will be announced on Oct. 14

We'll have to wait until Oct. 14 to get the September inflation number necessary to complete the calculation. This should arrive early that morning, and the 2027 COLA will officially be announced around the same time.

Once it's locked in, you can estimate the size of your benefit increase by adding the COLA to your existing checks. The Social Security Administration will also send all beneficiaries personalized COLA notices in early December, listing exact benefit amounts, including Medicare Part B withholding for those enrolled in that program.

Use the last few weeks of 2026 to plan your budget for next year. If you still have questions about your benefit after receiving your COLA notice, reach out to the Social Security Administration for clarification.

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The average 62-year-old will receive about $50 more per month from Social Security if the Senior Citizens League's latest 3.6% cost-of-living adjustment (COLA) prediction for 2027 holds. This might be less than you were hoping for, but it's actually above average compared to the last 50 years.

It's possible that the typical 62-year-old claimer could get more than this, though, if the COLA estimate increases over the next month. That depends on what inflation does.

Image source: Getty Images.

Higher inflation brings larger Social Security COLAs, while lower inflation leads to smaller boosts. Either way, it's a bit of a double-edged sword. More money is always great, but you'll have to pay more for the same everyday expenses, so you're not really improving your quality of life.

Still, any extra is helpful, especially if you've been struggling with rising costs throughout 2026. And you could get more than the $50 average for 62-year-olds if you're currently receiving an above-average benefit. The average 62-year-old's monthly check is roughly $1,379 in 2026.

Once we learn the official 2027 COLA on Oct. 14, 2026, you can add the COLA percentage to your existing checks to get a rough idea of how much more you'll get next year. The Social Security Administration will also send you a personalized COLA notice in December listing your exact benefit amount. If you have any questions after this, reach out to the Social Security Administration by phone or schedule an appointment at your local Social Security office for clarification.

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The 2027 Social Security cost-of-living adjustment (COLA) could add up to $187 to the wealthiest Americans' Social Security benefits next year. However, before you get too excited, you should understand that a boost this large is rare, and it may not happen for anyone.

The 2027 COLA isn't locked in yet, and to claim the maximum benefit increase, you'll need to earn the maximum checks. Here's what that looks like for those claiming at age 62, full retirement age (FRA), and age 70, along with a more realistic picture of what the average senior can expect next year.

Image source: Getty Images.

How the maximum benefit at 62, FRA, and 70 will change with a 3.6% Social Security COLA

The 2027 Social Security COLA is expected to come in at around 3.6%, according to the latest estimate from The Senior Citizens League. This would add about $187 per month to the checks of the richest Social Security beneficiaries. To claim these $5,181 checks in 2026, you must have paid the maximum amount of Social Security taxes for at least 35 years and have claimed Social Security at 70 years old.

Those who have paid the maximum Social Security taxes, but chose to sign up earlier, will still see substantial increases. The wealthiest beneficiaries applying at their FRA in 2026 receive $4,152 per month, which would increase to $4,301 with a 3.6% COLA. Those receiving the largest checks available to 62-year-olds currently get $2,969 per month. Their checks would grow to $3,076 per month if the 2027 COLA comes in at 3.6% as expected.

Actual benefit increases could be smaller if the COLA comes in lower than current predictions suggest. We'll have to wait until the official announcement on Oct. 14, 2026.

What the average senior can expect from the 2027 Social Security COLA

The average Social Security beneficiary received $2,086 per month as of July 2026. A 3.6% increase would grow this benefit to $2,161 per month -- a $75 bump. It's technically an above-average COLA compared to the last 50 years, and it's the largest since 2023. But it might still fall short of what you were hoping for.

Once we know the 2027 COLA percentage, you can add this to your checks to get an approximation of how much more you'll receive next year. Keep in mind that if you're on Medicare, you'll have Part B premiums withheld, and these are also expected to increase next year. Use the last few weeks of 2026 to build yourself a new budget so you're not caught off guard come January.

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A spouse passing away changes a lot emotionally, but it also has financial effects, including adjustments to your Social Security checks. If you'd been claiming a spousal benefit on your partner's work record, you'll no longer have that option. You'll also stop receiving the monthly retirement benefit they were earning.

But you'll qualify for a survivor benefit on their work record instead. This type of benefit looks different from what you're used to. Here are the three biggest changes to expect as you navigate this transition.

Image source: Getty Images.

1. Your monthly benefit will increase

If you'd been receiving a spousal benefit, you were entitled to, at the most, 50% of the amount your spouse was eligible for at their full retirement age (FRA). Once you switch to a spousal benefit, you qualify for up to 100% of the amount they were receiving or eligible for at the time of their death.

This could soften the blow of losing their retirement benefit. But you'll need to keep in mind that your household's Social Security benefits will still decrease as you drop from two checks to one. You'll need to make up the difference with other retirement income sources, like personal savings or a pension.

2. Remarriage could affect your survivor benefit eligibility, but not always

When couples divorce and one person remains eligible to claim on their ex's work record, remarriage automatically renders them unable to continue receiving a spousal benefit on their ex-partner's record. However, they may qualify for a spousal benefit on their new partner's work record.

Remarriage doesn't automatically disqualify you from claiming survivor benefits, though. It depends on your age at the time. If you're 60 or older (or 50 or older if you're disabled), you can keep your survivor benefit, even if you later remarry. Earlier remarriages would take this option off the table.

3. Your Social Security benefit tax situation may change

The government taxes up to 85% of your Social Security benefits at your ordinary income tax rate if your provisional income -- adjusted gross income (AGI), plus nontaxable interest, and half your annual Social Security benefit -- exceeds certain limits for your marital status.

With your marital status, your Social Security benefits, and possibly your household income and expenses changing, you could find yourself owing these taxes where you haven't before, or not owing them even if you did in the past. Consult an accountant to learn whether these taxes could be an issue for you going forward and to decide what you need to do to prepare for them.

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The 2027 Social Security cost-of-living adjustment (COLA) is the biggest piece of program news set to come out in the next few weeks, but workers and beneficiaries will also face several other changes come January. The Social Security Administration automatically adjusts a number of key benchmarks each year to account for inflation.

The following three changes may not all affect you, but chances are at least one of them will. Understanding these factors will help you better plan your budget for next year.

Image source: Getty Images.

1. Changes to the Social Security credit definition

You need to earn 40 Social Security credits to qualify for retirement benefits when you're older. One credit is defined as $1,890 in earnings in 2026, and you can earn a maximum of four credits per year. The earnings required to obtain a credit will increase next year, though we won't know by how much until the COLA announcement date on Oct. 14, 2026.

This change shouldn't affect you if you've already earned 40 credits or if you work full-time. Some part-time workers may not qualify for their full four credits in 2027, even if they have in years past, but many still will.

2. Maximum taxable earnings increase

High earners will pay more in Social Security payroll taxes next year as the maximum taxable earnings increase from their current limit of $184,500. Again, we don't know what the increase will look like, but it will probably cost wealthy Americans several hundred dollars next year.

Ordinary workers won't notice any difference from this because they already pay Social Security payroll taxes on everything they earn each year. If your annual income is already under $184,500, you won't have to worry about a surprise payroll tax hike in 2027.

3. Higher earnings test limits for working beneficiaries

Seniors claiming checks under their full retirement age (FRA) can cost themselves benefits if they're still earning a significant amount from their jobs. The earnings test withholds $1 from your checks for every $2 you earn over $24,480 in 2026 if you'll be under your FRA all year, or $1 for every $3 you earn over $65,160 if you'll reach your FRA this year and earn this much before your birthday.

These limits will increase next year, allowing working seniors to earn more from their jobs before it affects their benefits. Some beneficiaries will still lose money to the earnings test, but it's not all bad news. When you reach your FRA, your checks will get a boost to make up for what you lost to the earnings test before.

We'll learn all this and more on the morning of Oct. 14, 2026. Once we know the Social Security COLA and the changes listed above, you can begin to work out how these adjustments will affect your finances next year.

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Retirement looks drastically different depending on how much you have saved, your lifestyle, and where you live. But the average retirement might be more modest than you're expecting.

Workers are struggling to save enough for retirement on their own, and with pensions rare today, many people find themselves increasingly dependent on their Social Security checks. Here's what that looks like in practice and what you can do if your retirement savings aren't where you want them to be.

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What retirement looks like for the average 65-year-old

The average 65-year-old has $258,800 in their 401(k), according to Fidelity data from the second quarter of 2026. If we apply the 4% rule to this, that would give them $10,352 to spend in the first year of retirement. That amount would increase slightly each year to account for inflation.

You probably can't live independently on $10,000 per year, and most seniors wouldn't have to attempt it because they'd also receive Social Security benefits. The average monthly benefit is $2,086 as of July 2026. That adds up to roughly $25,000 per year. Together, that would give a single senior roughly $35,000 per year, plus any other retirement income sources they have. It's still not much, but it could be livable in some areas, especially if your home is already paid off.

Married couples might have a bit more breathing room, particularly if both spouses qualify for average or above-average retirement benefits. Two typical retirement benefits would give them roughly $50,000, plus their $10,000 in savings. Or possibly $20,000 in average savings if both spouses have their own 401(k)s. That could give them somewhere around $70,000 to spend annually.

That could be enough for some people to retire comfortably on, while others might still need more. You'll have to figure out what you need to save for retirement.

What to do if you're behind on retirement savings

If you haven't saved as much as you want for retirement, the obvious solution is to increase your savings rate and claim any 401(k) match you qualify for to make up the difference. But often, people struggle to save because they can't afford to.

In that case, you might have to look into a better-paying job or start a side hustle. Or you might need to rethink your retirement plans. You could push back your retirement date to give yourself more time to save, or opt for a phased retirement, gradually reducing your hours rather than retiring all at once.

Explore a few options, and choose the one(s) that works best for you. You can always change your mind as you get closer to retirement if your circumstances change.

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The average 401(k) balance is slowly but surely creeping up, reaching $155,800 as of the second quarter of 2026, according to a recent report from Fidelity. This suggests that Americans are working harder to save for their future and making real progress.

But that doesn't mean that if you're doing better than the average, that you're on track for a comfortable retirement, or that if you're behind, you're doomed.

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Retirement planning is highly individual. The amount you'll need to retire depends on factors like your life expectancy, where you live, and how you plan to spend your time. Your Social Security benefits and any other income sources you expect to have in retirement matter, too.

Looking at averages can tell you how you're doing compared to your peers, but it doesn't tell you whether you're on track to achieve your actual goals. To know that, you have to estimate how much you'll need in retirement based on your own personal factors.

There are different ways to do this. One of the simplest approaches is to estimate your annual expenses for your first year of retirement, subtract any benefits you expect from Social Security, and then multiply that amount by 25. Keep in mind that inflation will drive up living costs over time, and account for it when estimating your future annual expenses.

Once you know your savings target, figure out how you'll get there. A retirement calculator can help you with that. If you're not able to set aside as much as you need each month, you may need to rethink your strategy, such as pushing your retirement date back a few months or years.

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Saving in a 401(k) has gotten a bit more complicated for some older workers, thanks to a new rule taking effect this year that prohibits tax-deferred catch-up contributions for high earners. While most workers won't notice any changes, it's worth reviewing the rules anyway, just in case they apply to you in the future.

Accidentally making tax-deferred catch-up contributions when you're not eligible could lead to tax penalties. Here's what you need to know.

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You must make Roth catch-up contributions if your annual income is $150,000 or higher

A new 2026 law requires those making $150,000 or more in 2026 to make Roth catch-up contributions to their accounts, rather than pre-tax contributions. Catch-up contributions are the additional amounts adults 50 and older can save above the $24,500 standard contribution limit in 2026.

The change was intended to force wealthy Americans to pay taxes on their catch-up contributions in the year they make them, while they're likely in a higher tax bracket, rather than deferring these taxes until retirement. If this new rule applies to you, you may have to brace yourself for a higher tax bill when you file your 2026 return.

It might not be as bad as you think, though. You can still use a traditional 401(k) until you reach the $24,500 limit for the year. Then, you can switch over to a Roth 401(k) if you have one.

The size of the catch-up contribution you're allowed to make depends on your age. Those who will be ages 50 to 59 or 64 or older by the end of the year can make up to $8,000 in catch-up contributions this year. Those aged 60 to 63 by the end of the year can make up to $11,250 in catch-up contributions for 2026.

The silver lining

While no one loves a larger tax bill, Roth catch-up contributions have one big advantage when you retire: You won't owe taxes on those withdrawals. This gives you greater control over your future tax bills. For example, if you're nearing the top of your tax bracket during the final weeks of the year, you might switch to only using your Roth savings so you can avoid jumping up to the next tax bracket.

But in the near term, it's important to plan for larger tax bills. If you're used to getting refunds, you may not actually owe anything out of pocket when you file your return. You might just get less back than you expected. Consult an accountant for personalized advice on how this rule change could affect you.

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Social Security beneficiaries are just a few months away from what will likely be their largest benefit boost in four years. We're still a few weeks from the official 2027 cost-of-living adjustment (COLA) announcement, but high inflation is keeping the hopes of an above-average increase alive for millions of beneficiaries.

It's important to keep your expectations in check, though. Even a large COLA might not go as far as you expect it to.

Image source: Getty Images.

The latest 2027 Social Security COLA prediction is 3.6%

Recent 2027 Social Security COLA projections from The Senior Citizens League (TSCL) estimate that seniors will receive a 3.6% benefit boost next year. This is 0.8 percentage points higher than the increase seniors saw in 2026, making it the largest COLA since 2023.

However, the actual effect on your Social Security checks might be smaller than you expect. The average Social Security benefit of $2,086 per month as of July 2026 would only increase by $75 to $2,161 per month, and the average $987 spousal benefit would only rise to $1,023 per month.

The COLA likely won't enhance your quality of life, and for some, it won't even be enough to counter the inflation they've faced throughout 2026. You may still find yourself dipping into your personal savings to cover more of your costs next year or relying on other retirement income sources.

It's also worth noting that the 2027 COLA isn't locked in yet. We're still waiting on the inflation data from August and September. If those come in higher than expected, next year's benefit boost may be bigger than current estimates suggest. But if they're lower, there's a good chance the COLA will come in lower than expected, too.

What to do once we know the 2027 Social Security COLA

The Social Security Administration will announce the 2027 Social Security COLA on the morning of Oct. 14, 2026. Once you know that, you can add the percentage to your existing checks to get an estimate of how much you'll receive from the program next year.

Keep in mind that if you're on Medicare, your Part B premiums will likely increase next year as well. This will consume at least some of your COLA gains. You should get a personalized COLA notice in early December, specifying your exact benefit amount, including Medicare withholding. Use this information to start building your 2027 budget.

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The 2027 Social Security cost-of-living adjustment (COLA) will add up to $187 to the wealthiest seniors' Social Security benefits, if the latest projections are correct. The Senior Citizens League (TSCL) estimates that next year's COLA will come in around 3.6%.

We won't know the actual 2027 Social Security COLA until Oct. 14, 2026. We're still waiting on a few key pieces of inflation data that could change the picture. Higher inflation would mean a larger COLA, while cooling inflation would lead to a lower benefit boost for seniors.

Image source: Getty Images.

In any case, the average senior won't get anything close to the maximum $187 increase. COLAs are percentages, so those who receive larger checks today will also get larger COLAs in dollar terms. The largest Social Security check in 2026 is $5,181, but most people receive far less.

The average Social Security benefit as of July 2026 is just $2,086 per month. A 3.6% COLA would add roughly $75 to this check, bringing the new average to somewhere around $2,161 per month. That might be less than what you were hoping for, but it is larger than the boost seniors saw in 2026.

Once we know the actual 2027 COLA, you can add the percentage to your checks to get a rough approximation of what your Social Security benefits will look like next year. Keep in mind that if you're on Medicare, you'll have your Part B premiums withheld from your checks, and these are also set to increase next year.

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There are many rules of thumb about how much you need to retire comfortably, but a popular one from Fidelity says you should aim to have 10 times your income set aside by age 67. That looks different for everyone, but examining an average case can give you a rough idea of what the typical retirement costs are.

Below, we'll consider how much someone with average earnings would need to have saved by 67 to meet this and what milestones they'd want to hit along the way to know they're on track.

Image source: Getty Images.

How the 10x your income rule works for retirement savings

The average worker earned $1,251 in weekly earnings during the second quarter of 2026, according to the Bureau of Labor Statistics, giving them an annual income of about $65,000. If we multiply this by 10, that gives the average person a savings target of $650,000 by age 67 if they hope to retain their current lifestyle in retirement.

That might seem like a tall order, but you don't have to do it all on your own. Many employers offer a 401(k) match that can take some of the savings burden off your shoulders, and you'll also have investment earnings, too. Your earnings could be worth hundreds of thousands of dollars in their own right by retirement, especially if you started saving early and consistently.

Uncertainty about what your investment earnings could be worth can make it harder to know whether you're saving enough. That's why this savings strategy has built-in benchmarks along the way so you can track your progress. Fidelity recommends that you save:

• 1x your salary by age 30.
• 3x your salary by age 40.
• 6x your salary by age 50.
• 8x your salary by age 60.

Of course, this isn't always as neat as it sounds on paper. Chances are, your salary has changed over time, so you might not hit these milestones perfectly. That's OK. You likely still have time to catch up.

What to do if you're behind where you want to be

If you haven't saved as much as you'd like, the first step is to see if you can increase your savings rate. This might require you to rethink your budget a little. Make sure you claim as much of any 401(k) match that you're eligible for as possible, and try to increase your savings rate whenever you get a raise.

If that doesn't work, look into finding a better-paying job or pushing back your retirement date. The latter might not be ideal, but it gives you more time to save while also reducing the cost of your retirement. Explore a few strategies before you decide which is best for you.

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Once you've reached your full retirement age (FRA) -- 67 for most workers today -- you no longer have to worry about Social Security benefit reductions for early claiming. But if you're still working, your salary and benefits could put you at risk of owing taxes on up to 85% of your checks. Working and claiming Social Security at the same time could still make sense for you, but it's important to understand the financial implications before you commit to it.

You might be able to avoid benefit taxes with careful planning, though even if you can't, it's still worth knowing how they work. Preparing for these taxes in advance can help you avoid sticker shock when you file your return.

Image source: Getty Images.

How Social Security benefit taxes work

The Social Security Administration considers your provisional income -- adjusted gross income (AGI), plus any nontaxable interest from municipal bonds, and half your annual Social Security benefit -- when deciding whether you owe taxes on your benefits. The following table breaks down what percentage of your checks you could pay ordinary income taxes on, depending on your marital status:

Data source: Social Security Administration.

These thresholds aren't indexed for inflation, so it's possible you may run into them in 2026 or beyond, even if you've never owed them before. Having a job makes this even more likely because your salary will raise your provisional income.

How to prepare for Social Security benefit taxes

Sometimes, it's possible to reduce or even avoid Social Security benefit taxes by managing the other aspects of your provisional income. For example, you might reduce spending from your retirement accounts or drop to part-time work to reduce your salary. But this leaves you with less money for your living expenses today, so it might not be feasible for everyone.

When you cannot avoid benefit taxes, your next-best move is to prepare for them. Work with an accountant if necessary to figure out how much you're likely to owe in benefit taxes for the year. Then decide whether you need to set aside money for these taxes. If you normally get a large tax refund, this might not be necessary. Repeat this process each year to account for changes to your Social Security benefits and income.

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The 2027 Social Security cost-of-living adjustment (COLA) will give all seniors' checks a boost in January, but rising Medicare Part B premiums and possible Social Security benefit taxes may limit how far the COLA actually goes for you. There isn't an easy way around higher taxes and insurance costs, but preparing for them can at least help you avoid being caught off guard.

Here's a closer look at how to prepare yourself and your budget for 2027.

Image source: Getty Images.

1. Medicare Part B premiums

The Social Security Administration automatically withholds your Medicare Part B premiums from your checks if you're enrolled in both programs. Part B premiums typically rise annually, though we don't yet know what the 2027 increase will be.

You should receive a notice from Medicare later in the year listing the 2027 premiums and deductibles. The Social Security Administration will also send you a personalized COLA notice in early December. This will give your exact benefit amount for next year, including Medicare withholding. If you have any questions about this, contact the Social Security Administration after you get your notice.

2. Social Security benefit taxes

The Social Security Administration taxes up to 85% of your benefits at your ordinary income tax rate if your provisional income -- adjusted gross income (AGI), plus nontaxable interest, and half your annual Social Security benefit -- exceeds certain thresholds. The following table breaks it down:

Data source: Social Security Administration.

You may have faced these benefit taxes before, but you could pay more in 2027 than you have in years past because your provisional income will likely increase due to the COLA. If you've never owed Social Security benefit taxes in the past, next year could be the first time.

You might be able to avoid or reduce how much you owe in taxes by limiting your retirement account withdrawals, but this isn't always possible. When benefit taxes are inevitable, the next-best move is to plan for them.

Once you know the 2027 COLA, work with an accountant to estimate how much these taxes could cost you next year. Then, build them into your budget so you aren't hit with a huge, unexpected bill at tax time.

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Grief isn't the only thing losing a spouse triggers. You also have to make some big financial decisions, including whether to keep on with your Social Security retirement benefit or switch to a spousal benefit. You probably want to maximize your income, but there's no single strategy that works best for everyone.

Making the correct call between a retirement and a survivor benefit depends on understanding exactly how each benefit works. Here's what you need to know.

Image source: Getty Images.

Social Security retirement vs. survivor benefits

A Social Security retirement benefit is the benefit you qualify for based on your own work history. The more money you've paid Social Security payroll taxes on throughout your career, the larger your retirement benefit will be.

Married people might get a spousal benefit if they didn't work long enough to qualify for a retirement benefit on their own, or if the spousal benefit, worth up to one-half of the benefit their partner qualified for at their full retirement age (FRA), is larger than their own retirement benefit. But you cannot claim a spousal benefit once your partner has died.

Spousal benefits automatically convert to survivor benefits, worth up to 100% of what your spouse was receiving at the time of their death. If your spousal benefit was larger than your own retirement benefit, your survivor benefit will be, too. But those who had been claiming their own retirement checks face a more complicated choice.

You can continue on your own retirement benefit and postpone claiming your survivor benefit until your FRA, allowing it to grow further. This could be the right decision if you're trying to optimize your lifetime benefits, and your maximum survivor benefit would be worth more than your retirement checks.

If you haven't yet claimed retirement or survivor benefits, you'll have a choice of which to sign up for first. Again, if you can get by on the smaller of the two benefits for now, that's probably your better play. Allow the other benefit to continue growing until you max it out (FRA for survivor benefits, 70 for retirement benefits), and then switch over.

How to switch your Social Security benefit

You can switch between Social Security benefit types by contacting the Social Security Administration over the phone or by visiting your local Social Security office. You'll need to provide copies of your marriage certificate and your spouse's death certificate if you're switching to a survivor benefit.

Remember, it's difficult to undo your Social Security claiming decision once you've signed up, so think through your options carefully first. A Social Security Administration representative may be able to help you figure out which benefit type is more advantageous to you if you're not sure.

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We won't know the 2027 Social Security cost-of-living adjustment (COLA) for a few more weeks, but I'm pretty certain it'll be much higher than the 2.8% boost seniors saw this year. The thought of extra money is encouraging, especially for those struggling to get by on their existing benefits. But it's important to keep things in perspective.

Social Security COLAs are designed to help your benefits keep up with inflation, not to increase your standard of living. And even an above-average COLA might not go as far as you think next year.

Image source: Getty Images.

The latest 2027 COLA estimate is 3.6%, according to The Senior Citizens League (TSCL), down slightly from its earlier estimate of 3.8%. The decrease reflects slowing inflation over the last couple of months, and if this trend continues, the actual COLA might come in lower than current projections suggest. But inflation is unlikely to drop enough to bring next year's benefit boost in line with or below the 2.8% increase seniors saw in 2026.

A 3.6% Social Security COLA would add roughly $75 to the $2,086 average monthly retirement benefit as of July 2026. But you may get a larger or smaller boost, depending on how your current checks stack up to this average.

We'll learn the actual COLA on Oct. 14, 2026. Once we know the percentage, you can add it to your existing checks to get an idea of how much more you'll get from Social Security next year.

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Traditional 401(k)s and IRAs both have required minimum distributions (RMDs) beginning in the year you turn 73, but that doesn't necessarily mean you have to take money from every such account you own each year. There are unique rules governing each type of retirement account, and understanding them can help you hold onto more of your hard-earned savings.

There are two key RMD rules that can be especially tricky because they differ between 401(k)s and IRAs. Here's a closer look at how they work.

Image source: Getty Images.

1. You don't have to take RMDs from your current 401(k) if you're still working

If you're still employed and own less than 5% of the company you work for, even if you have reached the age where RMDs kick in, you aren't required to take RMDs from your current 401(k). You are, however, still required to take RMDs from IRAs and any 401(k)s from past employers.

This option to skip RMDs from your current employer's 401(k) only lasts until you actually retire. At that point, you'll have to start taking those RMDs as well, and they could be larger than you expected, as the account balance will likely be higher because your investments will have had a longer time to grow untouched.

2. You don't have to withdraw funds from every IRA every year

You are required to take RMDs for each of your traditional IRAs, but that doesn't mean you have to withdraw funds from every account. For example, if you have funds in two traditional IRAs -- one with a $5,000 RMD and one with a $10,000 RMD -- you can withdraw $15,000 from one and nothing from the other, $7,500 from each, or any combination you'd like as long as the total is at least $15,000. With 401(k)s, on the other hand, you must take the mandated RMD for each individual account from that specific account.

Leaving some IRAs untouched can help your savings last longer. For example, if you have one IRA that's performing well and another that's doing poorly, you might choose to take most or all of your RMDs from the one that's doing well rather than the one that's doing poorly so you don't lock in your losses.

You can also minimize how many RMDs you have to take by doing IRA or 401(k) rollovers to reduce the number of accounts you have to manage. Fewer accounts may not reduce the amount you need to withdraw for your RMDs each year, but it could make them easier to manage.

If you have any questions about how your RMDs could affect your taxes this year, consult an accountant who can give you personalized advice on your situation. And make sure you complete your RMDs before the deadline to avoid penalties. You have until Dec. 31 to complete your 2026 RMDs if you'll be 74 or older by the end of the year. Those who are turning 73 this year have until April 1, 2027, to take their first RMDs, but waiting until the following year to take your first required distributions means you'll be taking two years' worth of them in one year, which could lift you into a higher marginal tax bracket.

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The 2027 Social Security cost-of-living adjustment (COLA) estimate has fallen slightly, and further projections may also come in lower than expected if inflation remains steady or falls over the next couple of months. That could lead to a smaller benefit boost for seniors than they were expecting.

We won't know for sure until the official 2027 COLA announcement on Oct. 14, 2026. But it might be worth bracing yourself for a smaller benefit increase next year, just in case.

Image source: Getty Images.

The latest 2027 COLA projection is 3.6%

The 2027 Social Security COLA is expected to be around 3.6%, according to the latest projections from The Senior Citizens League (TSCL), a nonpartisan senior group. This is 0.2 percentage points lower than TSCL's 3.8% prediction from July.

Actual inflation in July was only 3.4%, which is where the potential for even lower COLAs comes in. TSCL is banking on inflation rising slightly over the next couple of months. Higher inflation is what triggers larger COLAs. If the inflation rate remains steady or drops over the next few months, then the current COLA projection could be too optimistic.

We'll get a better idea of what seniors can expect their Social Security benefits to look like next year when the August inflation data comes in on Sept. 11, 2026. This still won't tell us what the actual COLA will be, but with five of the six variables locked in, it should give seniors a close approximation of how much their checks will grow come January.

If the COLA ends up being lower than current guesses, that's not exactly a bad thing. Lower COLAs mean the cost of goods isn't rising as quickly, which could ease some of the financial pressure retirees have been living with throughout 2026.

What to do once the 2027 COLA is announced

When we know the official 2027 COLA, you'll be able to add the percentage to your existing checks to estimate your future benefit. Medicare beneficiaries should keep in mind that they'll have their Part B premiums withheld from their Social Security checks, and these costs will likely increase next year as well.

The Social Security Administration will send everyone personalized COLA notices in early December, giving your exact benefit amount, including Medicare withholding. Use this information to start building out your budget for next year.

Wait until your COLA notice arrives before reaching out to the Social Security Administration with any questions about your benefit. Once you know exactly what you're getting next year, you can make a call or visit your local Social Security office for more information about your specific situation.

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When people hear that an above-average 3.6% Social Security cost-of-living adjustment (COLA) is likely on the way, they almost never focus on how this short-term boost could lead to a long-term benefit reduction. Beneficiaries think about how much the COLA will add to their current checks and how it'll fit into their budgets next year. But there's a bigger picture worth considering.

Social Security's trust funds are running out of money, and we're now just six years away from a 22% benefit cut, according to the latest Trustees' Report. But a larger 2027 COLA could force potential Social Security cuts sooner than current estimates predict.

Image source: Getty Images.

Why a larger 2027 Social Security COLA could accelerate possible benefit cuts

A large 2027 Social Security COLA will increase seniors' benefits in the short term, while also inflating the program's expenses. Social Security's expenses have exceeded its income since 2021, and it's only been able to continue paying checks as scheduled by relying on its dwindling trust funds.

These trust funds are likely to run out faster than anticipated if benefits increase significantly next year, especially if this is followed by more above-average COLAs in years to come. But with the 2027 COLA not even locked in yet, an accelerated timeline to possible benefit cuts remains speculative.

We'll learn the actual 2027 COLA on the morning of Oct. 14, 2026. But we'll have to wait nearly a year for an update on how the COLA has affected Social Security's solvency.

Why a 22% Social Security benefit cut is unlikely, and what might happen instead

It's possible that Social Security's trust funds will be depleted earlier than expected, but that doesn't automatically mean benefit cuts will follow. The government will likely intervene to prevent major benefit reductions, just as it did the last time the program faced trouble in the 1980s.

We don't know yet what the Social Security fix might look like, but there's a good chance it involves raising payroll taxes on workers. Payroll and benefit taxes will be the program's only source of funding once the trust funds are depleted.

A tax increase would create problems of its own, though. Workers may find it more challenging to save for retirement on their own, which could increase their future reliance on their Social Security checks. But this isn't guaranteed, either.

For now, the best thing workers and seniors can do is to continue managing their money as usual. Keep saving for retirement if you're still working and watching your spending if you're already living on a fixed income. Once the government develops a long-term plan for Social Security, everyone will need to review their future plans.

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If you want larger Social Security checks in retirement, your primary focus should be on increasing your income today and verifying that the government has an accurate record of your earnings history. Increasing your income directly increases your future Social Security benefits in most cases, while correcting mistakes in your earnings record prevents clerical errors from costing you hard-earned money.

Here's a closer look at the three most important steps you can take right now if you want to maximize your future Social Security benefits.

Image source: Getty Images.

1. Correct errors in your earnings record

You can view your earnings record -- the record of how much money you've paid Social Security payroll taxes on throughout your career -- by creating a free my Social Security account. It's worth looking over your earnings record every year for mistakes, particularly years where the Social Security Administration shows no income when you know you've worked. Missing income could reduce the future benefit you're eligible for.

If you notice any mistakes in your earnings record, contact the Social Security Administration immediately. Submit a copy of your tax records from the year showing how much you actually earned.

One note for high earners: The Social Security Administration doesn't assess payroll taxes on all your income each year. If your income exceeded the taxable wage base for a given year, your earnings record will correctly show this number instead of your actual earnings. Income you didn't pay Social Security taxes on doesn't affect your future benefits.

2. Negotiate a raise or find a better-paying job

Increasing your income today will boost your future Social Security benefits, provided you're earning less than the taxable wage base for the year. One of the most effective strategies for boosting your income is to negotiate a raise with your current employer. A higher salary would give you more spending money today, as well as increase your future benefit checks.

When that's not an option, consider seeking out a better-paying position elsewhere, if you can find one. But there's more than just your future Social Security benefits to think about when considering a job change. Remember to weigh what the new position entails, what benefits it comes with, and what kind of schedule you'd have to keep before deciding whether it's right for you.

3. Start a side hustle

A side hustle is a great way to boost your income if you're unable to find a better-paying job or you don't want to leave your current employer. Many side hustles these days are flexible, so you can fit them in around your regular job and other responsibilities as needed.

Explore a few side hustles to see what makes the most sense to you. Remember to weigh any costs associated with the job to decide whether the profits feel worth it to you.

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The average 401(k) match, claimed consistently, could be worth $1.38 million by retirement, though several factors need to go your way for you to wind up with this sum. You have to consistently claim the average 401(k) match for your entire career and earn a strong average annual return to get the greatest possible value from your employer match.

Reality often prevents the best-case scenario, though. Sometimes, you run into a rough patch and can't save as much as you'd like. Or your investments don't perform as well as you'd expected them to. These unexpected bumps in the road don't need to derail your plans or make you give up on claiming your 401(k) match. You just need to prepare for a wider range of possibilities when it comes to the role your employer-matched funds will play in your retirement.

Image source: Getty Images.

How time, investment returns, and consistency affect the long-term value of your 401(k) match

Three major factors, apart from the size of your 401(k) match, determine how big a difference your employer-matched funds make to your retirement savings:

1. How consistently you claim your match
2. How long that match is invested for before you withdraw it
3. What kind of investment return you get on your match over time

The more consistently you claim your 401(k) match, the longer that money is invested, and the larger your investment return, the more money you'll have overall. But you can't control your exact investment return, so it's best to focus your efforts on claiming as much of your match as possible each year and leaving that money invested for as long as possible.

How the average 401(k) match could be worth up to $1.38 million by retirement

An average worker earns roughly $65,000 per year, according to Bureau of Labor Statistics data, and qualifies for a 4.8% 401(k) match, per Fidelity. A 4.8% match on $65,000 would give you an annual match of $3,122, which could grow to be worth over $1.38 million over 40 years, if you earn a 10% average annual return. But if you change one variable, the picture looks very different.

Keep the same 4.8% match on $65,000 and the same 10% average annual return, but halve the years to retirement from 40 to 20, and now you'd only wind up with roughly $179,000 for retirement. When your 401(k) match doesn't go as far, you'll have to make up the difference with personal savings, continue working, or settle for a lower standard of living in retirement.

You can't go back in time to claim matches you've left on the table, but you can make a point to claim as much of your 401(k) match as you're able to each year going forward. Even claiming a partial match can do a lot to alleviate the savings burden on you.

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Social Security beneficiaries will likely receive a smaller 2027 cost-of-living adjustment (COLA) than previous estimates suggested. The Senior Citizens League (TSCL), a nonpartisan senior group, recently updated its COLA forecast with new July data, lowering its estimate from 3.8% to 3.6%.

The COLA isn't locked in yet, though. We have to wait and see what inflation does over the next month and a half before we know what next year's benefit boost will look like, and a larger one may not actually give you the relief you're hoping for.

Image source: Getty Images.

What a smaller 2027 COLA could mean for your Social Security benefit

A 3.6% Social Security COLA would add roughly $75 to the $2,086 average monthly benefit as of July 2026, down slightly from the $79 increase a 3.8% COLA would have brought. Realistically, receiving $4 less per month won't make or break anyone's budget, but it could still be disappointing.

You may have hoped for a larger 2027 COLA, especially if you're struggling to cover your expenses with the benefits you're currently receiving. But a larger COLA comes with a hidden drawback: high inflation.

The Social Security Administration bases the annual benefit increase on changes in average third-quarter inflation from one year to the next. COLAs are larger in years with higher inflation, but that also means expenses rise more quickly. The extra money you receive goes toward covering the increased cost of goods rather than improving your lifestyle.

If the 2027 COLA remains at the estimated 3.6% rate or declines, that would signal that inflation is slowing. But we won't know the actual boost your checks will get until the Social Security Administration announces it on Oct. 14, 2026.

What to do when the 2027 Social Security COLA is announced

Once we know the actual 2027 COLA, you can estimate how much it will add to your checks by multiplying the percentage by your existing benefit. Keep in mind that if you're on Medicare, you'll have your Part B premiums withheld from your Social Security checks, and these may also increase next year.

In early December, the Social Security Administration will send all beneficiaries personalized COLA notices that list their exact benefit amount for next year. Use your future benefit and your average monthly expenses over the last several months to estimate how much you'll need to cover on your own next year. Taking the last few weeks of 2026 to build your 2027 budget can help you start January off strong.

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We don't know what the maximum 2027 Social Security benefit will be yet, but the steps to claiming it are clear: Apply for benefits at age 70, after paying the maximum Social Security payroll tax for at least 35 years. But there's a big difference between knowing what you need to do to claim the largest benefit checks and actually being able to pull it off.

For most people, the largest Social Security benefit will remain out of reach. But understanding why the following three factors lead to the largest checks can help you identify strategies to squeeze more out of the program.

Image source: Getty Images.

1. Work for at least 35 years before retiring

Your Social Security benefit is based on your average monthly earnings over your 35 highest-earning years. You can qualify for a retirement benefit with as little as 10 years of work history, but you might get less than you expect to.

When you haven't worked at least 35 years, you'll have zero-income years factored into your benefit calculation that reduce your checks. But there's no downside to working longer, especially if you're earning more now than in the past. After you've crossed the 35-year mark, your more recent higher-earning years start to push your earlier lower-earning years out of your benefit calculation.

2. Pay maximum Social Security taxes for at least 35 years

You earn the largest Social Security benefit by paying the maximum Social Security tax in all 35 of your highest-earning years. In 2026, you pay payroll taxes on the first $184,500 you earn. The ceiling on income subject to this payroll tax increases slightly each year.

Most people don't earn six figures, so claiming the largest Social Security benefit is out of the question for them. But anything you can do today to increase your future benefit, like negotiating a raise or finding a better-paying position, could result in bigger checks down the road.

3. Apply at age 70

The Social Security Administration first calculates your benefit at your full retirement age (FRA) -- 67 for most people today -- and then adjusts this amount up or down based on your actual age when you sign up. Claiming Social Security at less than your FRA reduces your benefit by up to 30%.

Delaying your application gradually increases the size of your checks, and this continues until you qualify for your maximum benefit at 70. However, waiting to sign up for Social Security isn't the right move for everyone.

You may prefer to apply for Social Security sooner if you're financially unable to delay, and you might come out ahead by signing up early if you have a shorter life expectancy. Consider a range of claiming ages before deciding when to apply for benefits.

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Delaying Social Security beyond your full retirement age (FRA) -- 67 for most -- until you qualify for your maximum benefit at 70 will add 24% to your checks, but it's important to understand the pros and cons of this move before deciding whether it's right for you. Delaying Social Security also means receiving fewer years of checks, and that's a dealbreaker for some.

The right time to claim Social Security often comes down to your financial situation and your life expectancy. Here's how to weigh these factors when deciding whether it makes sense to delay your Social Security application from age 67 to 70.

Image source: Getty Images.

The Social Security benefit you qualify for at your FRA is known as your primary insurance amount (PIA). The government calculates your PIA first, then adjusts it up or down to determine your actual Social Security benefit. Claiming before your FRA reduces your PIA by up to 30%, while delaying Social Security beyond your FRA grows your PIA by 2/3 of 1% per month, or 8% per year.

Delaying Social Security until you qualify for your maximum checks at 70 could result in a larger lifetime benefit if you expect to have an average or above-average life expectancy. If you expect to have a short life expectancy, claiming benefits earlier might be more advantageous.

Sometimes, you may have no choice but to claim Social Security early because you need your checks to cover your bills. That's OK. Signing up at age 67 or even earlier could be the smart move if it keeps you out of debt, even if it means settling for a smaller lifetime benefit.

A middle ground -- claiming Social Security at some point between age 67 and 70 -- could also be a smart strategy if you want some of the financial gain that comes from delaying your application without the long wait for your benefits. It doesn't hurt to explore the pros and cons of a few Social Security claiming ages before you decide which one is best for you.

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The long-awaited 2027 Social Security cost-of-living adjustment (COLA) announcement is now just a few weeks away. You're probably eager to learn what kind of benefit boost you can expect next year, especially after the high inflation we've faced so far in 2026.

We're still waiting on a few key pieces of information needed to perform the COLA calculation, but they will arrive over the next couple of months. Here's what you need to know.

Image source: Getty Images.

The Social Security Administration will officially announce the 2027 COLA on the morning of Oct. 14, 2026, at 8:30 a.m. Eastern. That's the day it finally gets the September inflation data, the last piece of information necessary to complete the COLA calculation.

The latest projections from the Senior Citizens League, a nonpartisan senior group, suggest the COLA will come in at around 3.6%. This is down slightly from the group's earlier estimate of 3.8% and reflects cooling inflation over the last couple of months. If inflation continues to slow, the COLA may come in a little lower than expected, and if inflation rises, your benefit may see a bigger boost.

A 3.6% COLA would add roughly $75 to the $2,086 average monthly benefit as of July 2026. But you could get more or less than this, depending on how your checks stack up to the current average.

Once the official Social Security COLA is in, you can use the percentage to get a rough idea of how much you'll get next year. The Social Security Administration will also send you a personalized COLA notice in early December stating your exact 2027 benefit amount.

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You're not imagining it: Saving enough for retirement has gotten more challenging than it was in the past. Earlier generations of retirees had pensions to rely upon and wages that kept pace with the rising cost of living. Social Security benefits also went further than they do today. Couple that with longer average life expectancies, and today's workers have their work cut out for them.

Many are responding by saving more, and the average 401(k) balance currently sits near record highs, according to recent Fidelity research. But whether the average person is on track for a comfortable retirement remains a very different question.

Image source: Getty Images.

The average 401(k) balance is $141,000

Fidelity research from the first quarter of 2026 found that the average 401(k) held $141,000, down slightly from $146,400 in the fourth quarter of 2025. But the total savings rate reached a record 14.4%, suggesting that savers are still stepping up their efforts to build a nest egg for retirement.

It's not possible to tell from this information alone, though, whether the average person is on track for a comfortable retirement. A lot depends on the specifics of when and how a person plans to retire.

A 25-year-old with $141,000 in savings is off to an excellent start and will likely retire comfortably if they can maintain that savings pace. A 65-year-old with only $141,000 is in a very different position. They'll likely be heavily dependent on Social Security benefits, and they may need to scale back spending in retirement to ensure they can still afford the essentials.

A lot also depends on when you plan to retire and how long you expect that retirement to last. Someone who thinks they'll only live for 15 more years and plans to live a quiet life in a rural area may need a lot less to retire comfortably than someone who expects to spend 30 or more years in one of the most expensive cities in the nation.

How to know whether you're on track for your retirement goals

While looking at averages can give you an idea of how you stack up to the average worker, it doesn't tell you much about whether you're on track for your goals. An online retirement calculator could be more helpful with this.

If you haven't yet worked out how much you think you'll need for retirement, try to estimate what your average annual expenses will be, keeping in mind that inflation will continue to drive up costs. Then multiply this amount by 25. Make this your savings target.

Sometimes you're not able to save as much as you'd like, and that's OK. Save as much as you can right now, and increase your savings rate whenever the opportunity presents itself.

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Medicare beneficiaries could face a bit of sticker shock next year when paying for their Part D plans, as the Center for Medicare & Medicaid Services has announced that it will end a subsidy program that helped keep premiums manageable for those with stand-alone drug plans. The changes will take effect in January 2027.

This could be alarming for those already struggling with their retirement healthcare costs. But there are steps you can take to keep your prescription drug costs under control next year.

Image source: The White House.

What's changing for Medicare beneficiaries in 2027

President Donald Trump's administration has elected to end the Part D Premium Stabilization Demonstration, a temporary subsidy program that reduced Part D premiums for seniors and capped the year-over-year premium increase. This program ran from 2025 through 2026, so if you've had a Part D plan within the last couple of years, you've likely benefited from these savings.

Without the subsidies in place, Part D premiums could increase much more in 2027 than in years past. That could force you to rethink your budget and may increase your annual spending faster than you expected.

How to keep your prescription drug costs manageable in 2027

We don't know exactly how much Part D premiums will be next year, but you'll have a chance to review them during Medicare's Open Enrollment Period, which runs from Oct. 15 to Dec. 7 of this year. This is your chance to elect new coverage for next year or to switch from Original Medicare to a Medicare Advantage plan or vice versa. Use this time to compare your options and choose the plan that covers your medications at the most affordable price.

If you have any questions about how your Medicare Part D plan will change next year, make sure to clarify them with the plan provider. One phone call now could save you a lot of confusion and unexpected costs down the road.

You can also explore other ways to keep prescription drug costs down, such as switching to a generic version of your medication if one is available, using coupons, or comparing prices at different pharmacies. Some drug manufacturers also offer financial assistance programs to seniors or low-income families that you may qualify for.

Once you have an idea of how much you'll pay for your Part D plan premiums and other Medicare-related costs next year, you can start building out your 2027 budget. Keep in mind that your Social Security benefits will also get a boost next year, so that will help cover some of your extra costs.

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Social Security is now just six years away from a possible 22% benefit cut, according to the latest Trustees' Report. It's made for a lot of scary headlines over the last few months, and for many people, it might be the first time they've learned how serious Social Security's financial situation actually is.

But this wasn't news to Washington. Social Security has been spending more money than it's taken in since 2021, and Congress knows it must act soon. Representatives and Senators are beginning to propose plans to keep the program sustainable, but if history is any indication, we're still several years away from an actual fix.

Image source: Getty Images.

There's no quick fix for Social Security

There are actually several strategies the government could use to avoid a 22% benefit cut and keep Social Security checks going out as scheduled for the foreseeable future. The problem is that all the options cost someone, and any solution will make some Americans very unhappy.

Benefit cuts would obviously harm seniors, many of whom are heavily or totally reliant upon their checks to cover their expenses. Disabled workers and their family members, as well as families of deceased workers, would also suffer if benefits were slashed.

But the only way around cutting benefits is to increase the program's income. That means raising taxes. Payroll taxes on workers fund the bulk of the program's costs. Increasing this would reduce workers' take-home pay, possibly making it more difficult for them to save for retirement on their own and cover their costs today.

However, there are ways to shift more of the burden onto high earners. For example, some in Washington have proposed eliminating the $184,500 ceiling on income subject to Social Security payroll taxes. Those earning more than this don't pay payroll taxes on income above this limit. Eliminating the ceiling would force these wealthy workers to pay more into the program without affecting average Americans.

Why we may still have to wait a few more years for a solution

Social Security faced problems like this once before in the 1980s, and back then, the government didn't come up with a fix until weeks before benefit cuts were slated to take effect. It's possible that, given the lack of painless solutions, this same pattern could repeat itself in a few years.

That's frustrating for workers and seniors who want to know how to adjust their budgets to prepare for what's coming. But there's no way to rush this decision. All ordinary Americans can do is focus on their own retirement plans.

Save as much as you're able to so you're less reliant on your Social Security benefits, and carefully adhere to your retirement budget to stretch your savings for as long as possible. Once Washington announces its plan to change Social Security, you can make changes to your retirement strategy.

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Ask most people who Social Security benefits help, and they can probably name seniors and people with disabilities. Some may even remember that the program pays benefits to spouses, some ex-spouses, and certain children of retired, disabled, and deceased workers. But there's one group almost everyone forgets about: parents.

Parents of a deceased worker may qualify for a retirement benefit on their child's work record. However, you must meet specific criteria to claim this type of Social Security check. Here are three things you need to know if you're interested in pursuing a parental benefit.

Image source: Getty Images.

1. Qualification requirements

Your child must have worked long enough to qualify for Social Security benefits for you to claim a parental benefit based on their work record. If they worked for at least 10 years, there's a good chance they qualified, and they may still have been eligible with a shorter work history, provided they worked at least 1.5 years of the three years leading up to their death.

You must also be at least 62 years old, and your child must have been providing at least half of your financial support at the time of your death. The parental benefit you qualify for must also be larger than the Social Security retirement or spousal benefit you're eligible to receive. If it's not, you'll receive your retirement or spousal benefit instead.

2. How much you'll get

Your parental benefit amount will depend on the Social Security benefit your child was eligible for at the time of their death. The larger their benefit, the more money you'll receive.

It also depends on whether one or both parents are claiming checks on the deceased child's record. When only one parent is claiming this benefit, they'll receive 82.5% of the worker's primary insurance amount (PIA). If both parents are claiming this benefit, they'll each receive 75% of the worker's PIA.

3. How to apply

Reach out to the Social Security Administration to see if you qualify for parental benefits and to begin the application process. You'll need to provide your personal information and Social Security number, and you'll need your child's birth and death certificates as well.

If you're having trouble locating this information, the Social Security Administration may be able to help you track some of it down. This process can take time, though, so it's best to start as soon as possible if you think you'll need these benefits to help make ends meet.

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The 2027 Social Security cost-of-living adjustment (COLA) is becoming clearer, with four of the six required data points now locked in. We're only missing two key numbers that will come in over the next couple of weeks.

Social Security COLAs are based on changes to average third-quarter inflation data -- that is, data from July, August, and September for the current year and the previous one. We've just gotten the July number, and we'll have the August data on Sept. 11, 2026. Here's what you can expect.

Image source: Getty Images.

The latest 2027 COLA projection from The Senior Citizens League (TSCL) is 3.6%. This is slightly lower than its earlier estimate of 3.8%, though still quite a bit higher than the 2.8% boost seniors got this year.

The 3.6% estimate is slightly higher than the July inflation rate of 3.4%, suggesting that TSCL expects inflation to tick up over the next couple of months. We'll find out whether that's true on Sept. 11 when we get the August data. But we'll have to wait until the September number arrives on Oct. 14, 2026, to learn the actual COLA.

Once that's locked in, you will be able to estimate how far your checks will go next year. You can add the COLA percentage to your existing benefit for a rough approximation of your 2027 benefit. The Social Security Administration will also send you a personalized COLA notice in early December, listing your exact benefit amount, including withholding for Medicare premiums if you're also enrolled in that program.

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Watching your savings dwindle is a frightening feeling, no matter when it happens. But when you're young and still able to work, you can at least reassure yourself that you can make some more. Once you're retired, that may no longer be an option for you.

There are things you can try to stretch your savings further, like sticking to a budget or applying for financial assistance programs. But those might not be enough in all cases. In that situation, it might be worth reconsidering your living arrangements to reduce costs further.

Image source: Getty Images.

How a move could make retirement a lot more affordable

Moving to a more affordable area in retirement can reduce how much you spend on rent or mortgage payments, and since housing is most people's largest expense, this can make a substantial difference to your monthly budget. Sometimes, a move can also lower other costs, such as groceries, insurance, taxes, or healthcare, depending on where you go.

For some people, moving within a city to a more affordable neighborhood is enough. Others choose to move to another state or even another country where they can stretch their savings further.

Not every move is cost-saving, though. If your home is already paid off and housing costs have risen substantially in your area since you first purchased the home, moving to a new place may not save you any money, even if the new home is smaller.

You also want to make sure that savings on housing expenses won't get replaced by higher costs elsewhere. For example, if your new state has higher taxes than you're used to and the difference in housing costs is small, you could actually wind up spending more. Make sure you compare all these variables when deciding whether relocating in retirement is right for you.

What to do if you don't want to move in retirement

Moving in retirement isn't the right call for everyone. You might be attached to your neighborhood or want to stay close to family or friends. That's understandable, but it means your strategy will have to change

If you still have a mortgage on your current home, you could try refinancing it over a longer term to see if you can get a lower monthly payment. Or if you have substantial equity in your home, you might consider a reverse mortgage to give yourself a little extra cash.

Renters have fewer options, so they may need to consider other cost-saving measures, such as taking in a roommate or negotiating with their landlord. You can also focus on lowering costs in other areas of your life.

Everyone's approach will look different, and that's OK. Focus on finding the strategies that make the most sense for you, and try them out for a few months. Then, evaluate whether they're working out how you thought they would, and make changes as necessary.

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Ask a group of seniors how they feel about required minimum distributions (RMDs), and you'll probably get a bunch of different answers. Many don't ever have to think about them because they already withdraw more than enough to cover their living expenses each year. For others, they can be a real pain because they don't need the money right now. But they're forced to sell their investments and pay a higher tax bill anyway.

If you fall into the latter camp, the solution isn't to skip your RMD and hope the IRS doesn't notice. That will result in a costly 25% penalty. Instead, you can take your RMD this year and start laying the groundwork to reduce your future RMDs with Roth conversions. But there's a trade-off to doing so.

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How Roth conversions can reduce your future RMDs

Roth accounts and your current 401(k), if you're still working and own less than 5% of the company, are the only accounts exempt from RMD rules once you turn 73. You can still withdraw from these accounts if you want to, but you can do so on your schedule. And you won't pay any taxes on Roth withdrawals because you already paid taxes on those funds when you made the contributions.

A Roth conversion enables you to convert traditional, tax-deferred savings into Roth savings. That can reduce your future RMDs. Your RMDs are based on your account balance as of Dec. 31 of the previous year. If that balance were lower, your RMD would be lower as well.

But there's a catch. When you make a Roth conversion, you must pay taxes on the amount converted. So you're not really avoiding taxes. You're just choosing to pay them at a different time than you would if you'd left the money in a tax-deferred account and paid your RMDs on schedule.

This could still make sense, especially if you expect your income to be lower this year than it will be in the future. Paying the taxes now when you're in a lower tax bracket could save you money compared to waiting a few years and paying a higher marginal rate.

How to do a Roth conversion

If you'd like to do a Roth IRA conversion to reduce your future RMDs, your first step is to decide how much you want to convert this year. Many people wait until the end of the year to do this, when they have a better idea of which tax bracket they'll fall into, and then they convert just enough to reach the top of that bracket. If they want to convert a large amount, they spread this out over several years.

Consult with an accountant if you're not sure how a Roth conversion will affect you. And make sure to complete yours no later than Dec. 31, 2026, if you want it to be applied to your 2027 RMDs.

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Retirement was once supposed to be a time of relaxation and reward after a long career, but it's increasingly become a time of stress and poverty as seniors manage rising costs on dwindling incomes. There are several reasons for this, including expenses growing faster than wages and Social Security's buying power slowly eroding over time. Many workers also don't have access to a retirement plan through their jobs.

The Trump administration has been exploring ways to help Americans retire more comfortably, and one idea the president floated last month was offering new retirement accounts modeled after Australia's retirement system. Here's what that could look like -- the good and the bad.

Image source: The White House.

How an Australia-inspired retirement account could help savers

Australia's retirement system includes a "Superannuation Guarantee" program. Basically, employers are required to withhold 12% of workers' pay and place it in tax-advantaged retirement accounts where it's invested until the person reaches age 65, or as young as 60 if they have stopped working by then. It's essentially a forced savings program. Workers don't have to think about saving money for their future because their employers do it for them.

A program like this could substantially increase the retirement savings available to a worker by the time they reach 65, compared to the current system, in which Americans save voluntarily and sometimes not at all if they can't afford it. But whether it's enough to retire comfortably on depends on factors like the person's salary, the return on their investments, and what kind of lifestyle they envision in retirement.

There's also a hidden drawback to this type of approach that could prove devastating to workers. If the government adopted Australia's system and required all employers to put 12% of employees' pay into retirement accounts for them, most employers aren't just going to give all of their employees a 12% raise and eat the losses themselves. That money will come out of employees' paychecks, leaving them with less cash in the present to fund their current expenses.

That could be a problem if you're already struggling to cover your bills on the income you have today. However, if such a system were to take effect, it might not happen all at once. The mandatory retirement contribution might start small and increase over several years, giving you time to get used to the new system.

It's only an idea for now

While the Trump administration is looking into whether Australia-inspired retirement accounts could work for the U.S., there are no concrete plans to make this a reality yet. So there's no reason to panic if you're worried about how this move could affect your finances.

For now, focus on saving what you can, and remember to increase your retirement contributions whenever you get a raise.

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Social Security was supposed to be one part of the "three-legged stool" of retirement planning, alongside personal savings and a pension. But as pensions have become rarer and living costs have risen faster than income, it's become the entire retirement plan for some Americans.

While the idea of monthly benefits for life is reassuring, many still worry about how much they'll have to slash expenses in retirement: half? More than half? The truth is, it depends a lot on the household. But here's what we know about how the average Social Security benefit stacks up to the average senior's expenses.

Image source: Getty Images.

How far does the average Social Security benefit go in retirement?

The average Social Security retirement benefit as of July 2026 is $2,086 per month. That adds up to a little over $25,000 per year. Meanwhile, the average spousal benefit is about $987 per month, or a little under $12,000 per year.

The average annual expenses for a household headed by an adult 65 and older were a little over $61,000 in 2024, according to the Bureau of Labor Statistics. This is the most recent data available. Average expenses are likely somewhat higher today due to inflation over the last few years.

If we assume the average senior household spends around $65,000 today, then a single adult earning $25,000 in Social Security benefits will have to pay more than half of their expenses on their own. But that's not true for everyone.

A married couple earning two average retirement checks would have most of their $65,000 in annual expenses covered by Social Security. However, it's impossible to say from these numbers whether that would be enough to retire comfortably on. That depends on where you plan to retire, how long you expect to live, and what kind of lifestyle you want.

How to estimate how far Social Security will go for you in the future

You don't have to guess at how your Social Security benefit will compare to the average. The Social Security Administration makes it easy to get a decent approximation through your my Social Security account. This is a free account, though you'll need to complete some identity verification questions during setup.

A tool here can estimate your Social Security benefit at every possible claiming age based on your income history to date and estimates of your future earnings. You can change the latter.

Use this information and your estimates of how much you'll spend annually in retirement to gauge how far your Social Security benefits will go. Then, start crafting a plan for how you'll cover the rest.

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At first glance, the idea that you might spend less in retirement than you do today seems logical. After all, once you're retired, you'll no longer have to save for retirement, and you may no longer have to pay to support children or elderly parents. That can significantly reduce your out-of-pocket costs. If you plan to move to a more affordable area, that could further reduce your expenses.

But some factors could work against your goal of keeping your retirement costs down. The three items below in particular could prove problematic unless you've planned for them in advance.

Image source: Getty Images.

1. Inflation

Inflation will continue to drive up living costs over time. That's not a secret, but it can be easy to overlook. You may have fewer expenses in retirement, but still pay more overall due to rising costs.

You can manage this by building inflation estimates into your retirement plan. The actual inflation rate varies over time, but you can use a 3% average annual rate as a rough estimate of how quickly your costs will grow.

2. Healthcare

Healthcare costs are also subject to inflation over time and often rise faster than the standard inflation rate. Many people find they require more medical care as they get older, even if they're relatively healthy.

A recent Fidelity report found that a 65-year-old retiring in 2026 will spend an average of $185,500 on healthcare costs in retirement. This does not include long-term care costs. If you underestimate this, you could find yourself burning through your savings faster than expected.

3. Social Security

You will likely be able to count on Social Security benefits to help you cover some of your retirement costs, whether you're retiring next year or in three decades. What's less certain is how far those checks will go.

The Senior Citizens League (TSCL) recently reported that Social Security benefits have lost nearly 14% of their buying power since 2016, and the program is also a few years away from possible benefit cuts. So, you may have to cover more of your retirement expenses on your own than you expected to.

None of the three things above has to derail your budget, though. Just make sure to build them into your retirement plan and remain willing to adapt if your circumstances change down the road.

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Social Security beneficiaries got some tough news recently as the 2027 cost-of-living adjustment (COLA) prediction fell from 3.8% in July to 3.6% in August. If the new estimate proves accurate, seniors will see a smaller benefit boost than had been anticipated. But there is a silver lining.

Even a 3.6% COLA would still be above average and well above the 2.8% boost seniors saw this year. It would also be enough to help the average spousal Social Security benefit reach a major milestone it's been inching toward for years.

Image source: Getty Images.

The average spousal Social Security benefit will likely cross the four-figure mark in 2027

The average spousal Social Security benefit lags well behind the average retirement benefit. The typical retired worker received about $2,086 in July 2026, while the average spousal beneficiary received just $987 per month. These averages tick up slowly over time as new beneficiaries with higher average earnings apply, but the coming COLA will bring a much bigger jump.

A 3.6% boost would raise the average retirement benefit by $75 to $2,161 per month, and the average spousal benefit would climb by $36. That's not a ton, but it is enough to push the typical monthly spousal benefit over $1,000 for the first time.

Of course, some people already receive spousal benefits of more than $1,000, and others still will not receive this much, even after the 2027 Social Security COLA takes effect. It depends on the size of your current checks.

How to know how much you'll get from Social Security in 2027

The Social Security Administration will announce the 2027 Social Security COLA on Oct. 14, 2026. That's the date it finally gets the last piece of inflation data necessary to run the calculation.

The COLA is a percentage, so you'll have to do a bit of math to figure out how this will affect your checks next year. Multiply the COLA percentage by your current checks, and then add this amount to your existing benefit. This will give you a rough idea of what to expect.

The amount you receive could be slightly different, especially if you have Medicare Part B premiums taken out of your checks. These will likely increase next year as well, so that may eat into some of your COLA gains.

The government will send you a personalized COLA notice in December, giving the exact benefit amount you'll receive. Wait until you've reviewed this before reaching out to the Social Security Administration with questions about how your benefits will change next year.

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The 2027 Social Security COLA projection just got an update, and it's not great news for seniors hoping for a huge benefit boost. The latest estimate from The Senior Citizens League (TSCL) puts the COLA at 3.6%, 0.2% lower than its previous prediction.

However, there is a silver lining. Even at 3.6%, the 2027 COLA would still be higher than the benefit boost seniors got this year.

Image source: Getty Images.

In 2026, Social Security benefits increased by 2.8%, so next year's COLA will almost certainly be an increase. But that's different from saying it's going to be life-changing.

The average monthly retirement benefit as of July 2026 is $2,086. A 3.6% COLA would add roughly $75, bringing the new average to about $2,161 per month. That might not be enough to cover all the price hikes you've experienced due to inflation this year.

It is still possible that the 2027 COLA comes in higher than current estimates, but this would require inflation to increase sharply over the next few months. The Social Security Administration bases COLAs on changes in average third-quarter inflation data, so August and September will be critical in determining next year's benefit boost.

The Social Security Administration will officially announce the 2027 COLA on Oct. 14, 2026. At that point, you'll be able to estimate how much your checks will grow next year and begin to plan a 2027 budget that works for you. If you find your benefits won't go as far as you'd hoped next year, you may need to rely more upon personal savings or seek out other retirement income sources to make ends meet.

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When seniors decide to apply for Social Security as soon as they turn 62, they're usually focused on what they're getting by doing so -- a monthly benefit, help with their bills, maybe enough extra income that they can finally retire. All of those things can be true, but they're not the whole story.

Claiming Social Security at 62 has some major drawbacks, too. Make sure you're comfortable with giving up the following three things before you decide to apply as early as possible.

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1. Larger monthly benefits

Claiming Social Security benefits at 62 shrinks your checks by 30% compared to signing up at your full retirement age (FRA), which is 67 for most people. This loss is generally permanent.

Every month you delay Social Security increases your benefits by anywhere from 5/12 of 1% per month to 2/3 of 1% per month until you qualify for your largest checks at 70. Some people prefer to wait longer to sign up so that their checks will cover a larger percentage of their monthly expenses in the future.

2. A larger lifetime benefit

Your lifetime benefit depends on the size of your checks and how long you claim them for. Applying early means more years of benefits, but each check is smaller. Delaying gives you larger checks, but fewer of them. Which claiming age gives you the largest lifetime benefit depends on your life expectancy.

If you expect to live to an average or above-average life expectancy, there's a good chance you get your biggest lifetime benefit by delaying your Social Security application until your FRA or beyond. Not everyone can afford to do this, but if you can, it might be a smarter play than settling for smaller checks over a longer period.

3. Larger survivor benefits for your family

The size of the retirement benefit you're receiving or qualify for at the time of your death determines the survivor benefits your loved ones receive after you've passed away. By claiming Social Security early, you're not just reducing your own checks. You're also reducing what your family will receive from the program in the future. That could be a problem if you expect them to be heavily dependent on these benefits.

This isn't to say that claiming Social Security early is always the wrong choice. It can make sense for some people. Just make sure you think through all of your options before you apply, and weigh the trade-offs of each claiming age.

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A $100,000 annual income was once enough to make an American feel fairly wealthy, but these days, it's more common than you might expect. It's no longer enough to buy an ultra-luxurious lifestyle, but it still buys a comfortable one in many places, especially for retirees who are no longer saving for retirement or caring for children.

If that's your annual retirement income target, you might need to save a bit more than you imagined to pull it off. Here's the nest egg you'd need, based on the 4% rule.

Image source: Getty Images.

How much you need to save to spend $100,000 per year in retirement

The 4% rule is a guideline devised in the 1990s by financial planner William Bengen, who was looking to determine how much retirees could withdraw from their nest eggs each year without worrying that they'd run out of money.

He found that you can safely withdraw 4% of your retirement savings in your first year of retirement. Then, in subsequent years, you can adjust that amount upward to account for inflation. In theory, if you do that consistently, your nest egg is nearly certain to last 30 years or more, but your mileage may vary.

So if you know what you want your annual retirement income to be in the first year of your retirement, you can multiply that number by 25 to figure out how much you'll need to have in your accounts at that point. In our example, that would give you a savings target of $2.5 million. But this assumes you're saving for retirement entirely on your own, which often isn't the case.

You will likely qualify for Social Security benefits, which will cover a decent chunk of your expenses. The average monthly retirement benefit as of July 2026 is $2,086. That adds up to just over $25,000 a year. If we subtract this from your $100,000 savings target, you'd only need to come up with $75,000 on your own. So your actual savings target would be $1.875 million. That's still a lofty goal, but it's easier to reach than $2.5 million.

You could need even less set aside if you expect to have other regular income sources, such as from a pension or a part-time job in retirement. Don't forget to subtract these expected income sources from your $100,000 target, too, as you figure out how much you'll have to save on your own.

$100,000 might not go as far in retirement as you expect

Tens of millions of retired people are managing on far less than $100,000 per year, but that doesn't mean that $100,000 is more than enough for you. You have to consider the lifestyle you're aiming for, where you plan to live, and when you plan to retire to decide on your savings target.

Moreover, there's inflation to consider: A $100,000 annual income might be enough for a comfortable retirement today, but if you're 30 or more years away from retirement, that sum will buy a more modest lifestyle. Don't forget to plan for inflation when estimating how much money you'll need to cover the retirement you desire.

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When you were younger, you might have thought of retirement as a time of freedom, a reward after a long career. But now you're there, and it feels anything but rewarding. You're living on a fixed income with no idea how long that money has to last you, and you're scared that Social Security will be cut by 22% in just a few years.

You might think your best play is to sign up as soon as you can to lock in your benefit amount before potential cuts take effect. But that could actually make things much worse for you in the long run.

Image source: Getty Images.

A 22% Social Security benefit cut isn't likely

While a 22% Social Security benefit cut is technically possible, given the latest projections, it's not likely. Washington knows that this program is extremely important to seniors, and that slashing benefits by nearly a quarter would leave a lot of unhappy voters. So it will almost certainly take steps to avoid this outcome.

We don't yet know what the reforms will look like, but there are ways to fully fund Social Security benefits for decades to come without slashing anyone's benefits. This might involve raising payroll taxes on workers, which has its own trade-offs. But that might not affect you.

Claiming Social Security at 62 comes with a guaranteed loss

If you rush to lock in your Social Security benefit by claiming as soon as you turn 62, you're agreeing to accept a 30% benefit cut. That's because the Social Security Administration reduces your benefit for each month you claim checks under your full retirement age (FRA) -- 67 for most people today.

This loss is generally permanent, and it can lead to a smaller lifetime benefit than you would have received had you waited until your FRA or until you qualified for your maximum benefit at 70 to apply. That doesn't mean waiting to sign up for Social Security is always your best option, though.

Claiming early can make sense if you're unable to cover your expenses without your benefits. Some people with short life expectancies also prefer to apply early so they can get as much as they can while they're still alive. Others, especially if they have family who they expect to be dependent on their survivor benefits after they pass away, opt not to claim checks at all so their relatives can get more money later.

If you expect to have an average or above-average life expectancy and you can afford to delay benefits, waiting to sign up might increase the lifetime benefit you qualify for. This is likely to be true even if Washington later reforms the program, so choose the starting age that makes the most sense for you based on current rules rather than on fears of possible benefit cuts. When the government announces changes to Social Security, you can adjust your plans if needed.

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After an unimpressive 2.8% Social Security cost-of-living adjustment (COLA) this year, followed by months of high inflation, you're not alone in hoping that the 2027 COLA will bring better news. We're still a few months away from the official announcement, but projections have already been circling for nearly a year.

The Senior Citizens League (TSCL), a nonpartisan senior group, estimated a 3.8% COLA in July 2026, but it has since updated its prediction. There's still time for it to change, but anyone hoping the COLA might cross the 4% mark is likely to be disappointed.

Image source: Getty Images.

The latest 2027 Social Security COLA estimate dipped

Following the release of the July 2026 inflation data, TSCL updated its 2027 Social Security COLA prediction to 3.6%. This is slightly higher than the 3.4% inflation rate in July and indicates that TSCL's model expects inflation to increase slightly over the coming months. But only time will tell whether this is accurate.

A 3.6% COLA would raise the $2,086 average monthly retirement benefit (as of July 2026) to $2,161. That's a $75 monthly increase. It's larger than the 2.8% boost seniors got this year, but it may still fall short of what you were hoping for.

The COLA percentage isn't locked in yet, though. We're still waiting on inflation data for August and September, and if inflation rises sharply during that period, a 4% COLA could still be a possibility. But this doesn't seem especially likely.

When to expect the 2027 Social Security COLA announcement

The Social Security Administration will announce the official 2027 COLA on the morning of Oct. 14, 2026. That's the day it gets the September inflation data necessary to complete the calculation. But you won't have to wait that long for a more accurate estimate. TSCL will share another update on Sept. 11, 2026, and this will likely be close to the actual 2027 COLA, as the only remaining variable will be the September inflation number.

Once we know the COLA, you can add this to your Social Security checks to get an idea of how much more you'll receive next year. Keep in mind that if you're on Medicare, the government will withhold your Part B premiums from your checks, and these are likely to increase next year as well.

You should receive a personalized COLA notice in December, detailing your exact benefit amount and how much will be withheld for Medicare. If you still have questions about your benefits after this arrives, reach out to the Social Security Administration for more information.

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Sometimes, you just want to get out and see the world after 40 years stuck working a 9-to-5 job. That's understandable, but it often takes more preparation than just booking plane tickets, especially if you're moving abroad. You'll need to plan for new taxes, a different cost of living, and a completely different lifestyle.

You usually don't have to plan for a retirement without Social Security, but there are a few exceptions. If you move to any of the nine countries listed below, you might have to get by without your benefits.

Image source: Getty Images.

The Social Security Administration will send your Social Security benefits to you in most other countries, except:

1. Azerbaijan
2. Belarus
3. Cuba
4. Kazakhstan
5. Kyrgyzstan
6. North Korea
7. Tajikistan
8. Turkmenistan
9. Uzbekistan

These destinations aren't at the top of most people's retirement bucket lists, so this shouldn't be a problem for most seniors. But if you were thinking about moving to one of these countries, you may need to plan your budget without factoring in Social Security.

With the exception of Cuba and North Korea, it is sometimes possible to receive payments in the other countries on the list above, but you must agree to restricted payment terms. Contact the Social Security Administration to learn more about this.

Do this before you finalize your move abroad, so that you have a realistic idea of what your retirement budget will look like. If you run into any problems, you may have to rethink your plans or consider delaying retirement to give yourself more time to save what you need.

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Required minimum distributions (RMDs) can be relatively uneventful if you routinely withdraw more than you need to cover your living expenses. But if you're only taking these withdrawals to avoid the IRS's 25% penalty for not doing so, they can be a serious pain.

You're forced to sell investments when you don't want to, and you'll face a higher tax bill as a result. Fortunately, if you understand how RMDs work, you can use the following three tricks to reduce your 2026 tax bill and hold on to more of your savings.

Image source: Getty Images.

1. You don't have to take RMDs from all of your retirement accounts

Several retirement accounts are exempt from RMD rules. You don't have to take withdrawals from your Roth accounts, since you don't owe taxes on these distributions anyway. You can also skip withdrawals from your current 401(k) if you're still working and own less than 5% of the company.

If you have old 401(k)s, you would still have to take RMDs from these, but you may be able to avoid this in future years by rolling the old 401(k)s over into your current 401(k). Check with your plan administrator to see if this is possible.

2. You don't have to take withdrawals from every one of your traditional IRAs

Traditional IRAs follow a special rule: You must calculate RMDs for each account individually, but you can withdraw that RMD from a different account, as long as your total IRA withdrawals meet or exceed your total IRA RMDs.

For example, if you have two traditional IRAs, one with a $5,000 RMD and one with a $10,000 RMD, you can withdraw $15,000 from one, $7,500 from each, or any combination you like, as long as the total withdrawn is at least $15,000. This isn't the case for 401(k)s.

If you have one IRA that is doing well and another that is doing poorly, you might prefer to take your RMDs from the one that's doing well, rather than selling assets in the other and locking in the losses.

3. You can do a qualified charitable distribution (QCD) to avoid the bigger tax bill

The IRS offers an alternative to RMDs for those who really don't want the increased tax bill -- a qualified charitable distribution (QCD). This is where you donate your RMD to a qualifying charitable organization. You won't get to keep the funds, but the IRS won't add them to your tax bill for the year either.

To do a QCD correctly, you must tell your plan administrator which organization you'd like to donate the funds to. It will then send the money directly to the charity or cut you a check in the charity's name that you can mail yourself. The check cannot be made out to you, or it won't count as a QCD.

You've still got plenty of time to sort out your 2026 RMDs. Adults who will be 74 or older by the end of the year have until Dec. 31, and those who will turn 73 this year have until April 1, 2027. But it doesn't hurt to start working out a plan, so you're not scrambling to sort this out right before the deadline.

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It's hard to overstate how much the rising popularity of GLP-1s has shaped healthcare over the last few years. Demand for these drugs has grown sharply, but access remains a challenge for many, due to limited insurance coverage.

Until recently, seniors on Medicare had to pay out of pocket if they wanted to try these drugs for weight loss. But the new GLP-1 Bridge Program launched last month is changing that, and the effects on seniors' health and wallets could be significant.

Image source: Getty Images.

How the Medicare GLP-1 Bridge Program works

The Medicare GLP-1 Bridge Program gives qualifying Medicare beneficiaries access to select GLP-1s for weight loss from July 1, 2026, to Dec. 31, 2027, for $50 per month. Currently, the covered drugs include:

• Foundayo (tablet)
• Wegovy (injection or tablet)
• Zepbound (KwikPen only)

To qualify for this, you'll need a prescription from your doctor, and you'll also have to meet the following criteria:

• You have a Medicare Part D plan or a Medicare Advantage plan with prescription drug coverage.
• You're not eligible to receive a GLP-1 through your Medicare drug plan.
• You don't have type 2 diabetes, moderate to severe sleep apnea, or fatty liver disease.
• You're at least 18 or older, and one of the following is true:
• You have a body mass index (BMI) of 35 or higher.
• Your BMI is 30 or higher, and you have certain types of heart failure, high blood pressure that's hard to control, or chronic kidney disease (stage 3a or above).
• Your BMI is 27 or higher, and you have prediabetes, or you've had a heart attack, stroke, or blocked arteries in your legs or arms.

Your doctor will also have to submit a prior authorization form to Medicare.

The savings could be pretty significant

Paying for GLP-1s out of pocket can cost hundreds of dollars per month, so the GLP-1 Bridge Program is an option worth exploring if you're interested in these medications. Because this program is separate from your Part D plan, the monthly co-pays won't count toward your Part D out-of-pocket maximum for the year, but the predictable $50 payments can still help keep your retirement healthcare costs manageable.

If the medications help you lose weight, this could also decrease your risk of other costly health conditions as you age. That could help you stretch your savings even further, which is useful if you're worried about running out of money early.

Start by checking with your doctor to see if you qualify for the GLP-1 Bridge Program, and reach out to the Centers for Medicare & Medicaid Services if you have any questions about how the program works.

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You can make an argument for or against every Social Security claiming age because there are genuine trade-offs with each one. That's how the system was designed, not to make things complicated, but to give people options while still trying to keep things somewhat fair for everyone.

There is no best claiming age for every senior, but there is one claiming age that tends to rise above the rest if you want the largest lifetime benefit. That doesn't mean it's the right choice for you, though.

Image source: Getty Images.

Why claiming Social Security at age 70 works best for most people

Your claiming age helps determine the size of your Social Security checks. First, the government calculates your benefit at your full retirement age (FRA), which is 67 if you were born in 1960 or later. Then, it adjusts that amount up or down, based on your actual claiming age. Claiming early can reduce your checks by up to 30%, while delaying benefits beyond FRA grows your checks until you qualify for your largest benefit at 70.

A study from the National Bureau of Economic Research found that virtually all Americans aged 45 to 62 would do best to wait until after age 65 to collect, and nearly 90% would get the greatest lifetime benefit by waiting until 70 to apply. Doing so would net the average person over $182,000 more in total Social Security benefits.

That could substantially improve your financial situation in retirement, but it comes with a trade-off. Delaying Social Security benefits until 70 requires you to cover your living expenses on your own until you're ready to apply. That might be doable if you're still working or have a large nest egg, but that's not the reality for many seniors.

How to decide whether claiming Social Security at 70 makes sense for you

When trying to decide whether to delay Social Security until 70, the first question to ask yourself is whether you can afford to do so. If going without Social Security for years would cause you to drain your savings or potentially take on debt, it's not worth it. Begin claiming earlier to keep yourself financially secure.

When finances aren't an issue, the best claiming age depends on life expectancy. Those who expect to live into their 80s or beyond generally get a larger lifetime benefit by waiting to sign up. Those with short life expectancies may get more overall by claiming earlier. But if you're married, keep in mind that claiming early will reduce the survivor benefits your family gets after you've passed away.

You don't have to lock yourself into one claiming age right now. You can decide on what makes the most sense for you right now, and then change that plan down the line if your circumstances change.

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Social Security benefits are poised to take a substantial leap in a few months, thanks to the 2027 cost-of-living adjustment (COLA), potentially offering some relief to families struggling with high inflation this year. But the program's long-term outlook is less optimistic. We're now just six years out from a possible 22% cut for all beneficiaries.

In his 2024 campaign, President Donald Trump vowed not to cut Social Security benefits, and it's likely that Washington will take steps to avoid this outcome. But avoiding cuts carries costs of its own.

President Donald Trump. Image source: The White House.

There's only one way to avoid benefit cuts

Social Security faces a possible benefit cut because its expenses have exceeded its income for years. This is due to changing demographics and slower wage growth among average earners compared to decades past. So far, the program has been getting by, tapping the trust funds to cover the shortfall between tax revenue and scheduled benefits. But that won't work much longer.

Once the trust funds are depleted in 2032, the program will only have income from payroll taxes and Social Security benefit taxes to fund future benefits. And avoiding cuts will likely mean raising these taxes.

Increasing the payroll tax rate would reduce workers' take-home pay by hundreds or thousands of dollars per year. This could actually make them more dependent on their Social Security checks in the future if the tighter budget leaves them unable to save for retirement on their own.

Raising benefit taxes on seniors would leave them with less money to cover their expenses. Many would tell you they're already struggling to get by on what they have, so that's obviously not ideal.

There are ways to reduce the burden on ordinary Americans

Ordinary Americans will almost certainly have to pay more to fund future Social Security benefits. Still, we don't know how much they'll owe yet, or which generations will shoulder the extra costs. It may not be as bad as you think, though.

Some options shift more of the burden to high earners. For example, current law only requires Americans to pay Social Security payroll taxes on the first $184,500 they earn each year. If this ceiling were eliminated, wealthy Americans would pay more into the program while average workers wouldn't notice a difference. This wouldn't be enough to eliminate the shortfall, but it would reduce the payroll tax increase needed to keep benefits going as scheduled.

Some members of Congress have proposed doing exactly this, but only time will tell whether it makes the final reform. For now, all you can do is focus on managing your own budget and retirement savings to the best of your ability and stay ready to adapt when Washington announces its new plan.

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