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Real Planning for Old Age

As you age, you should start thinking about the reality of your future. Time waits for no one. The harsh fact is that even if you don’t want to stop working, you may have to as you age. There are a few things that must be done to provide your future self with a secure financial retirement. 

Retirement Age

Deciding when to retire can be difficult without all the facts. Although the Social Security check can be a lifesaver, for many it is not enough to provide a comfortable lifestyle.

The longer you delay your retirement, the more money you will receive each month from the SSA. When you reach the full benefit age, you enter a scale where you can work out how much more you will get if you wait longer to receive benefits.

Each year you delay it goes up by 8 percent until the latest claiming age of 70. By age 70 your benefits are 132 percent of what they would have been at the normal retirement age. 

The maximum amount you can receive is $3,770. That applies to someone who has contributed the full number of years while working and files at age 70. This drops to $2,861 for someone who files at full retirement age (currently 66). If you start claiming earlier at 62, you will only get a maximum of $2,209 monthly. 

Saving and Investments

Other than waiting longer to retire, you should be setting up a savings and investment plan to help you cover all your expenses once you retire. If you are not familiar with the various investment options, this can seem like a minefield. To provide for retirement, you need to look for the sensible middle ground of investing. Speak to a financial advisor who specializes in retirement planning.

Working Part-Time

This is a good solution for many Americans who are fit and healthy well past retirement age. However, if you start taking Social Security before you have reached your full retirement age and you earn more than $17,040 a year from part-time work, your Social Security benefits will be reduced temporarily.

Another fact to consider is that once you’re on Medicare, if you generate extra income, it could potentially trigger surcharges for parts B and D. Your financial advisor can help you navigate these possible drawbacks.

Required Minimum Distributions

ONe you reach age 70 and a half you can use the required minimum distributions (RMDs) from retirement accounts. Some jobs have a 401(k) plan which doesn’t have RMDs, and you can still contribute to it. If you have any other regular or traditional retirement accounts and you don’t take your RMD, you could face a penalty tax as high as 50 percent. 

Planning for your future takes time, so make sure you get as much done as possible as soon as you can. Do your research, and get all your ducks in a row. That way, when the time does roll around, you aren’t worrying about how to pay the bills. You can put your plans into action, and reap the rewards.

 

IMPORTANT DISCLOSURES

Material contained in this article is provided for information purposes only and is not intended to be used in connection with the evaluation of any investments offered by David Lerner Associates, Inc. This material does not constitute an offer or recommendation to buy or sell securities and should not be considered in connection with the purchase or sale of securities.

To the extent that this material concerns tax matters, it is not intended or written to be used, and cannot be used, by a taxpayer for the purpose of avoiding penalties that may be imposed by law. 

Each taxpayer should seek independent advice from a tax professional based on his or her individual circumstances.

These materials are provided for general information and educational purposes based upon publicly available information from sources believed to be reliable– we cannot assure the accuracy or completeness of these materials. The information in these materials may change at any time and without notice.

David Lerner Associates does not provide tax or legal advice. The information presented here is not specific to any individual's personal circumstances. Member FINRA & SIPC

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