Read This Before You Get Your First Social Security Check

A lot of people look forward to a time when they're eligible for Social Security. And that's understandable, because who wouldn't want the government to send them a check every month for life? But before you get ready to retire and live on Social Security, there's an important thing you should know about those monthly benefits.

It's important to have realistic expectations

A lot of people assume that once their first Social Security check rolls in, they'll be set, since their benefits will cover their expenses from that point onward. But what a lot of people may fail to realize is that the amount of money Social Security pays you each month is not the same amount of money you were getting at your job -- not even close.

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It's a huge misconception that Social Security is designed to take the place of your pre-retirement paycheck. If you're an average earner, you can expect Social Security to replace 40% of the amount you earn (or earned) from your job -- and that's assuming benefit cuts don't happen. If Social Security is forced to reduce benefits on a broad scale, you could end up with a lot less income.

Now it's true that many people's living expenses do decline in retirement. But here are some expenses of yours that might increase once your career comes to an end:

• Home repairs, because your house may be aging
• Utilities, because you may be home more using electricity, water, and other resources
• Entertainment, because you'll have more hours to fill once you don't have a job keeping you busy during the week
• Healthcare, because medical issues might creep up as you get older, and because you might have higher costs under Medicare than under your employer-sponsored health plan

That's why it's not a good idea to assume that your monthly Social Security checks will be enough to cover all of your needs. While you may not need 100% of your former income to get by in retirement, 40% of your previous salary may not cut it at all.

Try to save as best as you can

It's not an easy thing to find money for a retirement account when you have other bills to pay. But if you retire on just Social Security, you might end up in a tough spot financially.

So to that end, try to contribute something each month to a retirement savings plan from here on out. It can be $50 some months or $250 other months when money isn't as tight.

Of course, the optimal thing is to automate the same monthly contribution to a retirement plan so you're staying on track and saving consistently. But if you can't commit to that, do your best to fund one of these accounts as your finances allow.

The promise of a guaranteed monthly paycheck is a good thing, which is why so many retirees are grateful for Social Security. But don't make the mistake of assuming you'll be all set once those Social Security benefits start rolling in.

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