Worried About Your Retirement? Well! You should be. Specially if you are fourty something and still have no clear plans for your retirement. Social security benefits alone are not going to be helpful at all. The maximum social security benefit depends on the age you retire. For example, if you retire at full retirement age in 2016, your maximum benefit would be $2,639. However, if you retire at age 62 in 2016, your maximum benefit would be $2,102. If you retire at age 70 in 2016, your maximum benefit would be $3,576.
Merely putting money in your saving accounts does not help either. The interest rate on you money in saving accounts probably does not even beat the rate of inflation. an that's why you MUST invest your money in some place where it can grow itself at a rate where the residual amount should be decent enough for your retirement, even after paying taxes and beating the inflation.
Every year, the IRS adjusts more than 40 tax provisions for inflation. This is done to prevent what is called “bracket creep.” This is the phenomenon by which people are pushed into higher income tax brackets or have reduced value from credits or deductions due to inflation, instead of any increase in real income. IRS uses the Consumer Price Index (CPI) to calculate the past year’s inflation and adjusts income thresholds, deduction amounts, and credit values accordingly. Rather than directly adjusting last year’s values for annual inflation, each provision is adjusted from a specified base year.
Click here for more information on tax brackets.
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