Steps to Retirement
Nearing retirement can be both exciting and scary. I mean, haven’t you been waiting for this day since you entered the workforce? While you should be looking forward to retirement, it is also a time to make sure your finances are in order and find out what you will and will not be receiving once you leave your full-time career. Even from an early age, we have learned how important it is to put money away for retirement, as well as any future needs. But if your savings don’t amount to as much as you imagined, Social Security benefits can be very helpful. However, in order to live comfortably after retiring, and afford all the things you may need, there are a few things to keep in mind; strive to accomplish these steps to retirement no later than five years prior to your retirement.
1. What are your Estimated Benefits?
This can be found online, any time before retirement, to see how much you are estimated to collect in benefits after retirement. To view your estimated benefits, create a mySocialSecurity account online. Most companies are trying to do away with paper statements, so unless you have requested that the Social Security Administration mail your statements, the only way to view them is online. This account uses your real earnings to estimate the amount you can expect to claim at full retirement age. Your online account is also a great way to keep your information accurate and up to date, you can be sure to correct any changes while you are still employed in order to avoid the hassle of trying to find out your real earnings by correcting information when you are about to retire. You can also monitor the steps you still need to take towards retirement.
2. When will you Claim?
Did you know you do not have to claim benefits immediately upon retirement? You can choose to claim later in life and still retire the right way. The longer you wait to claim, the more money you will receive; this is why it is strongly suggested that you plan for what age you will officially claim your benefits. You want to make sure you have more than enough in savings to get you through the first few years you don’t wish to claim. If you are to claim before your full retirement age (FRA) – 67 for birthdays in 1960 or later; 66 for those born before 1960 – as early as age 62, you could lose up to 30% of your benefits. For this reason, it is important that you take plenty of time to consider at what age you will begin claiming benefits.
3. Are you Married?
If you are married and expect that both you and your spouse will receive benefits, make sure you are preparing for retirement together and decide when you will both claim. It is suggested that the higher-earning spouse delay their benefits as long as possible (think closer to 70). This will increase overall income, and if one spouse is to pass, the other can claim the entire benefit amount of the deceased’s. You should be considering when each of you will claim and how much retirement income you are expecting. The earlier you start preparing, the more enjoyable your retirement will be!
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