"Enjoy the magic of compounding returns. Even modest investments made in one's early 20s are likely to grow to staggering amounts over the course of an investment lifetime." -- John C. Bogle

That's right, you can become a millionaire over time without pulling a six-figure salary, and maybe even if you earn an average income. Here's a look at how it can happen.

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Modest incomes

Sure, it would be wonderful to be earning, say, $100,000 or $200,000 per year -- especially if you're married to someone with similar or greater earnings. But that's not the norm. The Bureau of Labor Statistics has reported that the median weekly earnings of full-time workers in America were $1,194, or $62,088 for the year, as of the first quarter of 2025.

If there are two people in a household earning that, we're looking at household income of $124,176. But in many cases, a household may have one full-time worker and a stay-at-home parent or a part-time worker.

As we proceed, let's imagine people or households earning between $60,000 and $100,000. And know that people with modest incomes -- such as teachers and secretaries and janitors -- can become millionaires, and that more than a few average folks have done so.

How money grows

Before delving into the nuts and bolts of compounding, it's useful to understand what's possible. So check out the table below, which shows how money can grow over time. It assumes 8% average annual growth because while the S&P 500 has averaged annual gains of close to 10% over many decades (not including inflation), how it will perform over your particular investing time frame is unknown.

Data source: Calculations by author.

You can see that with enough time, it's possible to amass a million dollars or more, only socking away $600 per month -- which is less than many people's car payments.

Note that if all you can save and invest right now is just $300 or $500, it's still very much worth parking those dollars in the stock market because your earliest invested dollars are your most powerful ones. Also, there's a good chance that your income will go up over time, due to your getting raises, better jobs, or potentially a more lucrative career.

Compounding at work

So here's how compounding works. Note that "compound interest" and "compounded growth" are somewhat different things. Compound interest refers to interest-bearing accounts, where you might earn, say, 5% on your $1,000 account one year, adding $50 and bringing your account value to $1,050, and then 5% the next year, adding $52.50 for a new total of $1,102.50. So the amount your account grows by keeps increasing as your total value increases.

That also happens to be compounded growth, which stock investments can give you. For example, if your portfolio is worth $200,000 and it grows by 10%, it will add $20,000 of value and be worth $220,000. If it grows by 5% the following year, it will add $11,000 and be worth $231,000. If it grows by 15% the next year, it will gain $34,650 and become worth $265,650. That's compounding at work.

How can you take advantage of compounding?

For compounding to work its magic, there are three important factors:

• How much money you invest, ideally regularly
• How much time your money has to grow
• How quickly your money grows

To get the most out of compounding, then, aim to:

• Invest as much as you can reasonably invest, ideally regularly. Increase the amount of your investments as you're able.
• Give your money as much time to grow as you can. If you're starting late and hoping to retire at, say, 65, consider delaying a few years to give your portfolio a little more time to grow.
• Invest effectively. Know that it's hard to beat the stock market for long-term growth, so consider investing in one or more low-fee index funds, such as the Vanguard S&P 500 ETF.

It's possible for many of us to retire as millionaires, given enough time. We can let compound interest help us get there with our short-term savings and the compounded growth of long-term stock investing can help with the rest.

The $23,760 Social Security bonus most retirees completely overlook

If you're like most Americans, you're a few years (or more) behind on your retirement savings. But a handful of little-known "Social Security secrets" could help ensure a boost in your retirement income.

One easy trick could pay you as much as $23,760 more... each year! Once you learn how to maximize your Social Security benefits, we think you could retire confidently with the peace of mind we're all after. Join Stock Advisor to learn more about these strategies.

View the "Social Security secrets" »

Selena Maranjian has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Vanguard S&P 500 ETF. The Motley Fool has a disclosure policy.

Looking for an investment to add to your long-term portfolio? Consider the Vanguard S&P 500 ETF (NYSEMKT: VOO), which tracks the S&P 500. It's a smart buy for most investors at most times. Even Warren Buffett has recommended it, directing that most of the money he leaves his wife be put into an S&P 500 index fund.

Here's a closer look at the fund and what's in it. See what you think and whether it might be a good fit for you.

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Meet the S&P 500

Let's start with the S&P 500, which is the index tracked by this index fund. The S&P 500 is a grouping of 500 of the biggest companies in the U.S. Here are its recent top 10 components, by weight, as of early June:

Source: Slickcharts.com. ETF = exchange-traded fund.

Note that if you combine the two Alphabet classes, the total weighting is 3.82%, which would put it in fifth place in the ranking. You might also note that all seven of the "Magnificent Seven" stocks -- Apple, Microsoft, Google parent Alphabet, Amazon, Nvidia, Facebook parent Meta Platforms, and Tesla -- are held in the index in rather great proportion. Indeed, together, the top 10 holdings in the S&P 500 make up about a third of the entire index's value.

The S&P 500, like many stock indexes, is a market-capitalization-weighted index, meaning the biggest companies in it will have the most influence on it. That's evident just from the table above, which shows how much more influence Nvidia has than Tesla, and Tesla is the seventh-most influential component.

Remember, too, that there are 490 other stocks in the index, though most of them have relatively little influence on its movement individually. Other components include Costco Wholesale (recently ranked 18th), Starbucks (103), PayPal Holdings (150), Delta Air Lines (277), Ulta Beauty (357), and MGM Resorts International (485).

All together, these 500 companies comprise about 80% of the total value of the U.S. stock market. That's why the S&P 500 is often used as a proxy for the total U.S. stock market -- although doing so does omit thousands of smaller companies.

Why invest in an S&P 500 index fund?

So, why would you invest in a low-fee S&P 500 index fund, such as the Vanguard S&P 500 ETF? Here are some reasons.

For starters, it's a solid performer. The S&P 500 has averaged annual gains of close to 10% over long periods -- a rather powerful growth rate. Here's how your money might grow at that rate over time and at a slightly more conservative rate (because that 10% is not guaranteed):

Source: Calculations by author.

See? If you're diligent and stick with the program, you might amass a million dollars or more investing with just a simple index fund. On top of that, the S&P 500 index has outperformed a whopping 90% of managed large-cap mutual funds over the past 15 years. It's not easy to outperform an S&P 500 index fund.

One reason the S&P 500 index performs so well is that it's not comprised of the same 500 stocks for years and years. It gets adjusted over time. Now and then, some stocks are ejected from the index, and others are added. The ejected ones have likely been struggling or, at the very least, haven't been growing briskly, while the new components have grown enough to merit consideration for the index.

There are more reasons to love S&P 500 index funds: They give you instant diversification, spreading your dollars across technology companies (specializing in cloud computing, semiconductors, cybersecurity, and more), financial services companies, healthcare companies, consumer products companies, energy companies, retailers, and much more. You'll essentially be invested in the American economy.

Consider the Vanguard S&P 500 ETF

So, consider the Vanguard S&P 500 ETF. It's an exchange-traded fund (ETF) -- which is like a mutual fund but trades like a stock, allowing you to buy one or many shares through your brokerage account. It's a smart buy at just about any time, and many people will be best served by simply adding money to it over many years.

Vanguard is known for charging low fees, and this ETF sports an expense ratio (annual fee) of just 0.03%, meaning you'll be charged $0.30 annually for every $1,000 you have invested in the fund. Here's how the ETF has performed on an annualized basis over some recent periods:

Source: Data from Vanguard.com as of May 31, 2025. ETF = exchange-traded fund.

So, give the Vanguard S&P 500 ETF some serious consideration for a berth in your long-term portfolio. (Remember that short-term money that you may need within five or so years is best kept out of stocks.)

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Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool's board of directors. John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Selena Maranjian has positions in Alphabet, Amazon, Apple, Berkshire Hathaway, Broadcom, Costco Wholesale, Meta Platforms, Microsoft, Nvidia, PayPal, and Starbucks. The Motley Fool has positions in and recommends Alphabet, Amazon, Apple, Berkshire Hathaway, Costco Wholesale, Meta Platforms, Microsoft, Nvidia, PayPal, Starbucks, Tesla, Ulta Beauty, and Vanguard S&P 500 ETF. The Motley Fool recommends Broadcom and Delta Air Lines and recommends the following options: long January 2026 $395 calls on Microsoft, long January 2027 $42.50 calls on PayPal, short January 2026 $405 calls on Microsoft, and short June 2025 $77.50 calls on PayPal. The Motley Fool has a disclosure policy.

To fans of the television show Shark Tank, Kevin O'Leary is familiar, as he's a panelist on the program that showcases business ideas. He's a Canadian entrepreneur, who started the Softkey Software Products company. It saw great success and later bought the Learning Company, before being bought itself by the toy company Mattel.

O'Leary has ideas not only about entrepreneurship, but also retirement -- so check out some of his thoughts on that and see whether they might help you in your own retirement planning. They're chiefly drawn from his 2012 book, Cold Hard Truth on Men, Women and Money: 50 Common Money Mistakes and How to Fix Them.

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Debt and retirement

If you're carrying any debt, especially high-interest-rate debt (such as debt from credit cards), it's a good idea to pay it off or shrink it considerably before retiring. O'Leary notes: "If you're heading toward retirement with debt, now's the time to budget like you've never budgeted before. I mean it."

Paying down debts will free up more income that you can live off in retirement -- and it can give you more peace of mind and help you sleep better, too, if you don't have big mortgage payments or hefty credit card bills hanging over you in your golden years.

Your post-retirement income

O'Leary questions one common rule of thumb -- that retirees should plan to need 65% of their pre-retirement income in retirement -- saying:

This assumes that you will want to maintain roughly the same standard of living that you enjoyed when you worked a stressful life, working 40 hours a week away from home... Of course, you ate out a lot, bought hardcover books to read on the subway, and got a brand-new coat every winter... But in retirement, you won't need to finance your lifestyle in the same way. There will be no commuting, fewer lunches out, and lower dry-cleaning bills.

Still, he notes that each of us should be trying to come up with the most realistic estimate of how much we'll need in retirement instead of relying on any one rule of thumb: "If you don't think you can go days without spending money on useless crap like magazines, gum, or coffee, then you're going to be in trouble a few years into retirement..."

For context, know that as of March, the average monthly Social Security retirement benefit was $1,997 -- about $24,000 for the year. Of course, if you earned more than average, you'll collect more than average. (To get a good estimate of how much you can expect from Social Security, set up a my Social Security account at the Social Security Administration (SSA) website.)

So if you end up estimating that you'll need $80,000 annually in income in retirement, figure out how you'll get that. Here's what such a retirement income plan might look like:

• Social Security: $30,000
• Dividend income: $25,000
• Pension income: $15,000
• Selling off part of your stock portfolio: $10,000

It's good to have multiple income streams for your retirement, and yours could look different from the example above. You might, for example, have rental income or annuity income, or income from a part-time job.

Save more, spend less

If we want to be able to afford the retirement we hope for, O'Leary offers some good advice: "...[S]pend those last few working years socking away as much money as you can, but also use those years to practice living on a lot less, lowering your expectations, and cultivating disciplined spending habits..."

He also says: "Get a part-time job, too, while you're at it and while you're still spry enough to handle it." It's smart to save aggressively, and you might be able to do so now by shrinking your spending -- and perhaps by getting a side gig for a few or many years.

Also consider coming up with a household spending budget. Using a budget in retirement is a smart move, too, as it can help you not spend more than you should. You may even keep a part-time job for your first few years of retirement. Here's how your savings might grow over time:

Data source: Calculations by author.

When to retire -- and when not to retire

So -- when should you retire? O'Leary has a perfect answer: "Don't retire until you can afford it. Throw out your plan for freedom at 55 or even 65... If you have debt, you need your job, so you have to do everything in your power to keep it."

Only retire when you can afford it. Make sure you've set up a portfolio that you can draw on or collect dividends and/or interest payments from. Make sure you've set up sufficient income streams to support you in retirement. Keep inflation in mind and prepare for it. Don't forget healthcare costs, either, as they can be substantial. Finally, know that there are ways to increase your Social Security benefits.

The $22,924 Social Security bonus most retirees completely overlook

If you're like most Americans, you're a few years (or more) behind on your retirement savings. But a handful of little-known "Social Security secrets" could help ensure a boost in your retirement income.

One easy trick could pay you as much as $22,924 more... each year! Once you learn how to maximize your Social Security benefits, we think you could retire confidently with the peace of mind we're all after. Join Stock Advisor to learn more about these strategies.

View the "Social Security secrets" »

Selena Maranjian has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Trying to keep up with the Joneses isn't usually a good idea. But trying to keep up with -- or outperform -- others in your age group is a fine idea when it comes to saving for retirement.

Here is a look at average 401(k) account balances for those aged 65 and older, along with some younger cohorts, via Vanguard.

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Data source: How America Saves 2024, Vanguard.

See? Those nest eggs are still on the small side. Even $272,588 isn't going to support anyone very well over, say, a 25-year retirement -- it's not even $11,000 annually, and by year 25, inflation may have shrunk the buying power of those dollars by 50% or more.

Meanwhile, we really should be looking at the median numbers, and they're even lower! As a reminder, medians reflect the midpoint value in a series of numbers, while averages are just... averages, potentially skewed by ultra-high or low outliers. For example, imagine this series of numbers: 8, 2, 7, 31, 7. To average them, add them together and divide by five. The average is 11. But arrange them in order -- 2, 7, 7, 8, 31 -- and the middle value -- the median -- is 7. Median numbers can often give you a more representative idea of a typical value in the group of numbers.

So if you're not yet retired and you're behind in your saving and investing for retirement, what can you do? Well, start by saving more and investing long-term dollars effectively -- perhaps in a simple, low-fee index fund. Consider taking on a side gig for a while, to earn more. You might also delay retiring by a few years, while delaying claiming Social Security, too. (For most folks, the best strategy is to wait to claim until age 70.)

The $22,924 Social Security bonus most retirees completely overlook

If you're like most Americans, you're a few years (or more) behind on your retirement savings. But a handful of little-known "Social Security secrets" could help ensure a boost in your retirement income.

One easy trick could pay you as much as $22,924 more... each year! Once you learn how to maximize your Social Security benefits, we think you could retire confidently with the peace of mind we're all after. Join Stock Advisor to learn more about these strategies.

View the "Social Security secrets" »

The Motley Fool has a disclosure policy.

Could investing in a simple, low-fee S&P 500 index fund today set you up for life? You may not want to know the answer. You may prefer to hunt for exciting growth stocks instead. But I'm here to tell you that regularly plunking meaningful sums in an S&P 500 index fund can do wonders over long periods.

Even Warren Buffett has endorsed S&P 500 index funds, stipulating in his will that much of what he leaves his wife should go into one. Here's a look at why you might consider investing in an S&P 500 index fund, too.

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Meet the S&P 500 index

An S&P 500 index fund is an index fund that tracks the S&P 500 -- an index (a grouping) of 500 of the biggest companies in the U.S. The fund will hold roughly or exactly the same stocks in roughly the same proportion, aiming for roughly the same performance -- less fees. And there are some very low fees out there.

Here are the recent top 10 components in the index by weight:

Data source: Slickcharts.com, as of April 16, 2025.

It's worth noting that this index is a market-capitalization-weighted one, meaning that the biggest companies in it will move its needle the most. For example, you can see in the table above that Microsoft's weighting is about four times that of Tesla, so Microsoft's stock-price moves will make a much bigger difference in the index than will Tesla's. Of course, these are still the top 10 components. General Mills is also in the index, recently in 255th place, and with a weighting of just 0.07%. Toy company Hasbro, in 488th place, recently had a weighting of 0.02%.

Altogether, these 500 companies make up about 80% of the total value of the U.S. stock market. Thus, the S&P 500 is often used as a proxy for the market. It's mainly made up of giant, large, and medium-sized companies, though. If you want a more accurate proxy, you might opt for a broader index fund, such as the Vanguard Total Stock Market ETF (NYSEMKT: VTI), which aims to include all U.S. stocks, including small and medium-sized ones, or the Vanguard Total World Stock ETF (NYSEMKT: VT), encompassing just about all the stocks in the world.

Why invest in an S&P 500 index fund?

Here's a top-notch S&P 500 index fund to consider -- the Vanguard S&P 500 ETF (NYSEMKT: VOO). Its expense ratio (annual fee) is a mere 0.03%, meaning that for every $1,000 you have invested in the fund, you'll pay an annual fee of... $3.

Why invest in such a fund? Well, because it can perform really well over time and it's way easier to just keep adding money to it than to spend time studying investing and scouring the stock market for the best investments. Instead of looking for a few needles in a haystack, buy the haystack!

Owning shares of an S&P 500 index fund means you'll quickly own (small) chunks of 500 of the biggest companies in America -- and as some companies grow and others shrink over time, the index will be adding and dropping components accordingly.

The table below shows how big a nest egg you might build over time in an S&P 500 index fund, if your money grows at 8%. For context, the S&P 500 has averaged annual gains of around 10% over many decades -- including dividends and not including the effect of inflation. So using 8% is a mite conservative.

Source: Calculations by author.

If that's not convincing enough, know that you probably can't do as well with some other, managed large-cap stock mutual fund. The S&P 500 index has actually outperformed most such funds, which tend to be run by highly trained financial professionals working hard to outperform the index. Over the past 15 years, for example, the S&P 500 bested 89.5% of all large-cap funds.

Whether you opt for a low-fee S&P 500 index fund or not, be sure to have a solid retirement plan, and to be saving and investing in order to have a comfortable financial future.

Where to invest $1,000 right now

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*Stock Advisor returns as of April 21, 2025

John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool's board of directors. Selena Maranjian has positions in Alphabet, Amazon, Apple, Berkshire Hathaway, Broadcom, Meta Platforms, Microsoft, and Nvidia. The Motley Fool has positions in and recommends Alphabet, Amazon, Apple, Berkshire Hathaway, Meta Platforms, Microsoft, Nvidia, Tesla, Vanguard S&P 500 ETF, and Vanguard Total Stock Market ETF. The Motley Fool recommends Broadcom and Hasbro and recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.

If you're making good use of tax-advantaged retirement accounts such as IRAs and 401(k)s, good for you! They can be powerful helpers as you save and invest for retirement. You need to be aware, though, that once you reach a certain age, some of those accounts will make you take Required Minimum Distributions (RMDs).

Here's a look at what RMDs are, along with several critical things to understand about them. If you mess up with RMDs, the penalties can be quite costly.

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Meet the Required Minimum Distribution

Our friend -- the Internal Revenue Service (IRS) -- requires people to take annual RMDs from accounts such as traditional IRAs, SEP IRAs, and SIMPLE IRAs once they reach the age of 73. When you do so, that income will count as taxable income to you -- so it's smart to account for it when you're devising your retirement plan. Failing to have a retirement plan is a big mistake. Here are seven others, all related to RMDs.

1. Missing the RMD deadline

First, don't be late! You have until April 1 of the year after you turn 73 to take your first RMD. After that, though, the deadlines fall on Dec. 31. So your second RMD will be due on Dec. 31 of the year you turn 74.

You might want to take your first RMD in the year you turn 73. Otherwise you face having to take both your first and second RMD in the same year, the year you turn 74. That can boost your taxable income a lot for that year.

2. Withdrawing the wrong amount -- or not withdrawing at all

When taking your RMD, you'll want to withdraw the correct amount -- at least. You can calculate your RMD by referring to an RMD table, but many good brokerages will calculate your RMDs for you and will often let you set up automatic withdrawals. That can help you avoid missing the deadline, though it's also smart to check now and then to ensure that your brokerage has indeed scheduled your RMD.

If you fail to take your full RMD on time, you'll likely pay a steep price. The penalty for not taking them on time is 25% of the amount you failed to withdraw on time. Fail to take out $6,000, and you may face a $1,500 penalty! (You may be able to pay a smaller penalty if you notice that you just missed the deadline and take action quickly.)

3. Not understanding how RMDs from IRAs and 401(k)s work

Here are some things to know about RMDs from various types of accounts:

• With Roth IRAs and Roth 401(k)s, you do not need to take RMDs.
• With traditional IRAs and with 403(b) accounts, if you have more than one account, once you total your RMDs from all of your accounts, you can withdraw that total sum from just one or from multiple accounts. So if your RMD for the year is $6,000, you could take all $6,000 from just one of your IRAs, or $2,000 from one and $4,000 from another, or some other combination.
• With traditional 401(k)s, you must take the RMD required from each one, and you can't mix and match as you can with IRAs.
• If you're still working, you may not have to take your RMD from your workplace's retirement account until you retire.

4. Thinking your spouse's RMD counts as your own

If you're married and both you and your spouse have RMDs to take each year, you can't withdraw from one of your accounts to satisfy the requirement for the other spouse. So, for example, if your RMD is $6,000 and your spouse's is $4,000, you can't take $10,000 from your account and consider theirs satisfied. Each of you will need to withdraw your own RMDs from your own account(s).

5. Donating to charity without considering a qualified charitable distribution (QCD)

If you donate to charity, you may be able to avoid being taxed on some or all of your RMD if you execute a "qualified charitable distribution" (QCD). Doing so means you would have funds sent directly from your retirement account to a qualifying charity. You cannot just withdraw the money and donate it and then expect to pay no taxes on the withdrawal -- the sum needs to go directly to the charity. There are some other rules, too, so read up on this if it's of interest to you.

6. Spending your RMD when you don't need to do so

Some people mistakenly think they have to take their RMD and spend it. That's not the case. You can always reinvest that money right away, parking it in shares of stock, certificates of deposit (CDs), or wherever you want.

7. Not keeping up with RMD changes

Finally, be sure to keep up with RMD rules, because they can change sometimes. For example, according to some new rules, some beneficiaries must take RMDs from inherited IRAs, depleting them within 10 years. This rule doesn't apply to spousal heirs, but does apply to most heirs who were not married to the IRA owner who died -- if that IRA owner had reached age 73 before dying.

The more you know about retirement accounts, RMDs, and tax matters, the more you may be able to save.

The $22,924 Social Security bonus most retirees completely overlook

If you're like most Americans, you're a few years (or more) behind on your retirement savings. But a handful of little-known "Social Security secrets" could help ensure a boost in your retirement income. For example: one easy trick could pay you as much as $22,924 more... each year! Once you learn how to maximize your Social Security benefits, we think you could retire confidently with the peace of mind we're all after. Simply click here to discover how to learn more about these strategies.

View the "Social Security secrets" »

The Motley Fool has a disclosure policy.

Many of us are at least occasionally dreaming of retirement, looking forward to days when we won't have to clock in and work for someone else -- days when we can do more of what we want to do.

If you're counting down to your retirement and are looking forward to collecting Social Security benefits, make sure you're ready to do so. Here are some questions you might ask yourself.

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Image source: Getty Images.

1. Do you qualify for Social Security?

Let's start with some basics. Make sure you qualify to collect benefits. The bar is admittedly low. To be eligible for benefits, you need to earn a total of 40 credits, and you can earn up to four per year -- so you'll need to work and earn money for at least 10 years.

The value of each credit is updated annually, and for 2025, it's $1,810 -- which amounts to just $7,240 over the course of a year. Note that while you need to work at least 10 years, you'll want to aim for 35, because your benefit amount is based on your earnings in the 35 years in which you earned the most. Work for fewer years and some zeroes will get factored into the calculation.

2. Are you at least 62 years old?

Sixty-two is the earliest age at which you can claim your retirement benefits. Know that each of us has a "full retirement age" at which we can start collecting the full benefits to which we're entitled based on our earnings -- and that age is 66 or 67 (It's 67 for those born in 1960 or later.)

While you can turn on the Social Security spigot at age 62, doing so will result in smaller checks, though many more of them than if you claim late. If you delay starting to collect checks, they'll plump up by 8% for each year beyond your full retirement, until age 70.

The decision regarding when to claim your benefits is a big one, so think it through carefully. One study found that for 57% of people, waiting until age 70 will deliver the most total benefits.

3. Do you know how much to expect?

It's important to know how much to expect from Social Security, so that you can plan your retirement accordingly. Yes, the average monthly retirement benefit for retired workers was just $1,981 as of February -- only around $23,750 per year -- but you may well be in line to collect more.

To get a much clearer idea of how much you can expect from Social Security, set up a my Social Security account at the Social Security Administration (SSA) website. Then you'll be able to click in any time to see the latest estimates of your future benefits based on the SSA's records of your earnings.

If you don't like what you see, you're in luck -- because there are multiple ways to increase your Social Security benefits, beyond delaying claiming them. For one thing, while you're still working, try hard to earn as much as possible, even if that means a side gig for a while.

4. Are you able to retire?

It's also important to look beyond Social Security at your bigger financial picture, to see if you can retire. Don't assume that your nest egg will be sufficient until you crunch some numbers. For some people, retiring with a million dollars will be enough, for others it may be much too little -- or too much.

If you find that you're behind in saving and investing for retirement, there are several strategies to consider -- including delaying your retirement a bit.

5. Have you coordinated with your spouse?

If you're married, have you coordinated a Social Security strategy with your spouse? You might, for example, have the higher earner between you delay until age 70, in order to maximize their benefit. The lower earner might start collecting early, late, or somewhere in between -- whatever makes sense given your financial situation.

Why do this? Because when one spouse dies, the survivor will be able to collect whichever benefit is larger for the rest of their life.

6. Have you seen the news?

Finally, here's a somewhat new concern regarding Social Security. Not so long ago, I might simply have offered a warning that the program's surplus is turning into a deficit and if nothing is done to strengthen Social Security, its trustees estimate that beginning in 2035, beneficiaries will receive only 83% of what they're due. Yikes. (There are multiple ways to fix this problem, though.)

Now there's a new concern -- the Trump administration, which is making moves to change Social Security in ways that may leave it weaker, sooner. So it's worth keeping up with developments in the news as they may affect your future financial security. The more you know, the better your retirement plan may be.

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