Daily Money - How to Maximize Unemployment Benefits

Think about how much your bills cost in 2009. While inflation has been pretty tame over the past decade, you’re probably paying more than you used to for expenses like groceries, property tax, and health care. Now consider this: in inflation-adjusted terms, the average weekly unemployment benefit rose by just $1.24 from 2009 to 2019. In other words, the purchasing power of an unemployment check rose a little more than a dollar in a decade, according to a Money analysis of Dept. of Labor data. But it’s not news to the millions of Americans laid off in the pandemic that unemployment doesn’t cover their needs. The extra $600 in weekly federal benefits helped a lot, but that’s long gone now. Learn more about unemployment insurance — and how to get the most money you’re eligible for — in today’s edition.

In our Retire with Money Facebook group this week, members discussed this article on the risk of declining cognitive functioning in retirement. One woman wrote, “The human brain is elastic—use it or lose it. Way too many people think retirement means one no longer has to learn new things, which is the biggest mistake.” I couldn’t agree more. And learning can be lots of fun. One of my favorite retirement recommendations — dancing! — is a three-fer: you get the cognitive stimulation of learning new steps, the physical exercise of movement, and the social stimulation of being in a group. Granted, you might not seek out the third during the pandemic, but you can still get the first two benefits from YouTube dance tutorials!

Planning for retirement can be tricky; after all, there's no way of knowing for sure how much money you may need. You can start by estimating how much you may spend each year in retirement. You probably won't spend as much each year in retirement as you do during your working years, so you'll only need to replace part of your income in order to maintain your lifestyle in retirement. As a general rule of thumb, you can estimate that your savings (including a pension, if you have one) should provide a yearly income equal to about half of your pretax, preretirement income. Your Social Security benefits may cover the rest of your annual retirement expenses, but it depends on your spending and lifestyle. The age at which you claim Social Security benefits can have a significant impact on your monthly income too. Click below to see if you are saving enough for retirement.

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