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August 18th, 2015 by

Longevity odds

Knowing when to claim distributions from your retirement nest eggs will help you outlive the longevity odds. Because each person’s situation is different, there is no “one size fits all” when making these decisions. But, a retirement expert can help you weigh the options and guide you to the best decision for your retirement goals. Here’s how:

Boost Lifetime Benefits

Social Security benefits can be claimed by eligible workers at any age between 62 and 70. Retired workers can claim a reduced (70% to 75%) benefit at age 62, but eligibility for the full retirement benefit ranges from age 66 to 67 (depending on birth year). For each year Social Security is delayed after full retirement age, the annual benefit grows automatically by about 8%, up to age 70.1

Thus, someone who is currently eligible for an $1,800 monthly benefit at age 62 could receive $2,400 at full retirement (currently age 66) or as much as $3,168 by delaying benefits to age 70. In this example, the individual who files at age 70 instead of age 62 would receive more than $16,000 of additional income every year for the rest of his or her life. This is only an example: actual results will vary.

Plan for Longevity

In theory, benefit calculations are actuarially neutral, which means that recipients who live an “average” life span should receive the same lifetime Social Security income regardless of when they begin collecting benefits. However, you may want to consider the possibility that you and/or your spouse could live well beyond that “breakeven” point.

Delaying benefits is more likely to pay off for women and married couples. If the higher-earning spouse waits to file for the highest possible Social Security benefit, his or her spouse could eventually receive a higher survivor benefit after the death of the high earner.

Consider Future Taxes

If retirees delay filing for Social Security and receive income from IRA withdrawals and taxable financial instruments in their early retirement years, they might pay more taxes initially but less over the long term. Even though retirees who live mainly on Social Security income in the early retirement years might pay little or no income taxes on their benefits, after they reach age 70½ and must start taking RMDs, the income tax liability on IRA income and Social Security benefits combined could be more onerous.

Distributions from traditional IRAs are taxed as ordinary income. Withdrawals taken prior to age 59½ may be subject to a 10% federal income tax penalty, with certain exceptions.

Preserve Your Nest Egg Dollars

The funds that you will need during the early years of your retirement should generally be put into financial vehicles conservatively. Otherwise, your nest egg could be depleted if you are forced to sell during a down market.

The age at which you sign up for Social Security is an important personal decision. It should generally be based on many factors including your marital status, health, work situation, financial resources, tax burden, and retirement goals.

Source: 1) Social Security Administration, 2014

Freeman Owen, Jr - Host of "Safe Money Talk" on CBS Radio The Big Talker 1580AM

There is expert guidance available to your for your retirement planning goals.

Meet me for a FREE retirement strategy consultation at my office at 833-313-7233 | MD, VA & DC. 

 

 

August 13th, 2015 by

retirement-plan

Retirees often claim Social Security before reaching full retirement age and leave tax-deferred IRAs untouched until age 70½, when they must start taking required minimum distributions (RMDs). In fact, about 75% of current Social Security recipients claimed early benefits before age 66.1

Some retired couples might be better off with the opposite approach: taking IRA withdrawals in their 60s in order to delay Social Security until age 70, when benefits would reach their maximum payout.

Although you may not be counting on Social Security to survive, the lifetime benefits you receive could add up to a meaningful percentage of your retirement income. In the long run, you could miss out on thousands of dollars in benefits if you rush to file before carefully considering your options.

Source: 1) The Wall Street Journal, March 17, 2014

Freeman Owen, Jr - Host of "Safe Money Talk" on CBS Radio The Big Talker 1580AM

Retirement Planning help is just a phone call away!

Meet me for a FREE retirement strategy consultation at my office at 1-833-313-7233 | MD, VA & DC. 

 

 

August 10th, 2015 by

aug2015_how_confident_are_you

How Confident Are You Regarding Your Retirement Plan?

If you feel that you’re uncertain about your retirement plan, don’t hesitate to consult with an expert. A retirement specialist can review your short term and long term goals and direct you on where to focus your attention to achieve those goals. Many times, there are things you can miss. So, rather than going it alone, let me help you determine where you are and let’s decide together where you want to be during retirement.

Freeman Owen, Jr - Host of "Safe Money Talk" on CBS Radio The Big Talker 1580AM

Getting Retirement Planning Help is easier than you think!

Meet me for a FREE retirement strategy consultation at my office at 1-833-313-7233 | MD, VA & DC.