The point is that when you set up your retirement savings account, do some math. Figure out what you will need to live on and look at the time frame in which you want to retire and put that amount of money away each week or month. Don’t depend on Social Security to do the job as it will only provide about 20 to 25% of what you will need to maintain your standard of living.
Hopefully you won’t have a mortgage when you retire because generally that payment would consume 30-40% of your income. Most home prices will stabilize over the next 10 years and most people underwater right now will be ahead. You can plan on selling that big old house and rent in a retirement community. Growth of this type of community is expected to increase by nearly 40% over the next 10-15 years.

If you haven’t set up a retirement savings account don’t wait, do it now even if you plug in the minimum amount. But I don’t have any extra cash to spare! Well the statistics show that you are not alone, 50% of men and women who are now in their 50’s are not ready. According to a survey, 51 percent of workers age 55 and up have saved less than $50,000 in retirement savings (not including the value of a primary residence). And 39 percent of workers in the same age group have saved less than $25,000 in retirement savings. Just set up your retirement savings account, remember, it’s never too late, whatever you do will be a help.

Create An Asset Allocation Strategy You are Comfortable With. Spreading your investments in your retirement accounts in a variety of holdings will help you deal with the ups and downs of the stock and bond market, and keep your savings somewhat stable. Traditional investment strategies suggest that the younger you are, the more risk you can absorb. Those who are preparing for retirement should consider shifting to a more conservative mix. Many financial planners are suggesting target-date mutual funds, based upon age group, which gradually get more conservative as the investor gets closer to retirement. It also is important to remember that your money may have to last 25 – 30 years, so it is important that the allocation strategy is not too conservative as you move into retirement. You will need to keep up with inflation.

Only you know what you are comfortable with, so talk to your financial planner. Trust yourself to make the decisions right for you.

Plan Your Income Stream. Before you stop working, determine how much money you will take each year from your retirement accounts and Social Security. Some financial planners recommend you take only 4% of your retirement funds each year, with a 3% increase each year to cover inflation. However, in current economic conditions, you should consider putting off dipping into your investments until the market has recovered to some extent, or reduce your withdrawals below the 4% level. You also have no need, at this point, to increase the withdrawal until inflation is once again positive.

Social Security minimum age is age 62. If you can afford to wait until full retirement age (people born between 1943 and 1954, age 66), you will receive an “delayed retirement credit” that adds 8% to your benefits each year until age 70. If you go online, you can download the Social Security Administrations retirement planner to figure out when you want to start receiving your benefits.

Eliminate Debt. Pay off those credit cards before you retire! If you can’t pay those balances at the end of the month while you are earning a steady pay-check, it is unlikely you will be able to pay them off once you retire. Tackle those with the highest interest rates first. Some suggest transferring those balances to low-interest cards so that more of your money is going toward the principal amount owed than to interest charges.

Pay off your mortgage before you leave your 40 hour a week job. This is, for the most part, your single largest bill. Another option is to decide whether you want to downsize or move to a more cost-effective location to boost your retirement nest egg.

Lifestyle Makeover. Simplify your life. Cut back on expenses, and stick with a budget. If you have been in your house for long enough, consider selling your familial home for an empty-nester home, or even moving to a more affordable part of the country.

Other ways to simplify and cut costs: buy a more economical car, own one car rather than two, delay an expensive vacation until the stock market has recovered a bit more (a $10,000 vacation will remove $150 from your monthly income stream). Grow a garden, eliminating some grocery expenses. You will eat better food and get some exercise!

Sign Up for Medicare. Health care is becoming one of the biggest expenses we are facing. First, check to see if your employer offers retiree health benefits or if supplemental insurance will be necessary. Next, become familiar with the rules for Medicare, including when you need to sign up. Some basic facts you need to know: Medicare open enrollment starts three months before you turn 65 and ends three months after your 65th birthday. If you miss the six-month window, you will go without coverage until the following general enrollment period of Jan 1 through Mar 31 of the next year. The exception is for people still working full time and are on their employer’s health plan. Their enrollment period starts as soon as they officially terminate employment. Also, take note that Medicare does not cover dental expenses.

Buy Long-Term-Care Insurance. The biggest threat to your retirement finances is, by far, an extended stay in a long-term-care facility. I have read that an average nursing home costs between $55,000 and $75,000 a year. If you are over 50, the premiums are relatively expensive. If you can afford them, the premiums are worth it. Your spouse will still have funds to live on, and your children will not have to deal with issues around where to put Mom or Dad if they fall ill. Some important benefits to consider include inflation protection and the freedom to hire home health-care so you can remain in your own home.

Georgia Feiste, owner of Collaborative Transitions, located in Lincoln, NE, is a business, career and personal life coach, writer, and workshop facilitator. Her passion is helping individuals accomplish what they want in life based on their standards of integrity and priorities in life. She provides support and encouragement as her clients set goals to attain their desires, holding open the space they need to stretch and grow. Georgia currently writes columns for the Lincoln 55+ Senior Newspaper. Her website is http://www.collaborativetransitions.com

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Your social security retirement earnings and your social security retirement forms can be found at your local social security office or at the U.S. Post office.You may have  some questions about your age eligible social security and your social security requirements.When can I retire and what is the social security retirement age?What are my social security retirement benefits? You will find more information on this site that will help guide you thru the process. The social security retirement age 62 is a standard and you cannot collect until you achieve that age. You can apply social security retirement before that day.Read more that is lots of info here to help guide you.

Your company pensions and social security benefits might not be enough for planning a cross-border settlement. You should have a strong financial base in order to implement such a life-size retirement plan. The size of your savings is an important determinant when it comes to settling in any foreign country. However, a more clear answer to the question of how much you need to retire abroad can be provided only when you decide your location. There are no standard rates to decide just how much you need to retire abroad. Nevertheless, you can take it for granted that it is surely going to cost you more than what you are living on right now, in your own country.

Primarily, the standard of living in the country to which you are moving defines your basic budget requisites. The only way to cut down your cost is to choose a place where cost of living is lower, but such countries might not be able to provide you with high quality standard of living to which you are accustomed till now. If you are someone who loves the countryside atmosphere then you can opt for living in less urbanized places. This will be quieter and cheaper. There are several European countries which attract lot of retirees who come there and settle down for the rest of their life.

While calculating the budget for migrating to your new destination you should take into consideration the investment and saving rules applicable in that country. It is important to educate yourself regarding the laws and practices of your new country because most probably you will be living in there for the rest of your life. There might be variations in these rules for non-resident Americans. You should also consider the maximum senior citizen benefits applicable to you. All the countries might not provide efficient medical care for senior citizens as in US. Such factors might considerably increase your cost of living in a foreign country.

Real estate prices are another inevitable factor which you must consider in detail while planning your retirement budget. The distance from your own country to this new place is also an important factor which determines your total cost. No matter how far you go, your roots will beckon you back to your motherland sooner or later. If you intend to visit your friends and relatives often in a year then your decision to live abroad can be an expensive one. Once you figure out how much you need to retire you can begin planning for how you can achieve that goal and make the Autumn of your life even more exciting than the Spring!

Retirement Benefits

Deciding when to take Social Security benefits is an important life decision. And one you can’t change your mind about. Plus, the initial benefit will be your “base” amount the rest of your life. Only increases in cost of living can cause an adjustment to the amount.

The key to making the decision a little easier is to think about two events as separate-when you want to retire and when you want to begin receiving Social Security benefits. In addition, understanding how benefits are calculated, taxed, and what happens if you continue working after you begin receiving Social Security.

For reduced benefits: retire early

The earliest age you can begin receiving Social Security is age 62. But the benefits paid will be reduced to reflect that you’ll be paid over a longer period of time. This amount varies based on your year of birth. For example if you were born in 1937, the Normal Retirement Age (NRA) for you is 65. If you decided to receive benefits at age 62, your benefit may have been reduced to 80% of what it could have been if you had waited three years. If you were born in 1962, the NRA is age 67. If you decide to receive benefits at age 62, then your benefits will be reduced to 70% of what it would be if you waited four years.

For full benefits: retire at NRA

For a long time, the NRA was set at age 65 to receive the full benefits or 100% of an person’s Primary Insurance Amount (PIA), calculated by the Social Security Administration based on the lifetime earnings record. For those born in 1938 or later, the NRA gradually increases until it reaches age 67 for those born in 1960 or later.

For bigger benefits: retire later

If you can wait, you can get paid a larger retirement benefit. For each year beyond your NRA that you wait until age 70, your benefit increases by a specified percentage of the PIA. The credit amount, for each year you wait, varies depending on what year you were born. For example, if you were born in 1943 or later, delaying your retirement increases your benefit by 8% per year for each year you wait until you turn 70.

Early or Late. Which is better?

You can get a good idea by doing a “break-even” analysis to estimate the age you’ll be when the total value of the higher benefits, when you delay retirement, is higher than the total value of lower benefits, if you were to retire earlier.  

If you expect to live longer than your break even age, you probably could benefit from waiting to receive Social Security. If you are in poor health or if people in your family tend to die at younger ages, you will probably get a better benefit by beginning your benefits earlier.

SS Benefit Federal Income Tax

Social Security benefits may be subject to income tax. When half of the Social Security benefit and the modified adjusted gross income exceed a specified limit, then a portion, up to 85%, of that benefit is taxable. For married couples filing joint, the limit is $32,000, for most others it’s $25,000. For those married couples filing separately and who lived with their spouse at any time during the year, the limit is $0. State or local income taxes on Social Security benefits vary.

Excess Earnings Reduced Benefits

If you begin getting Social Security benefits and you continue to work, your benefit will be reduced temporarily if your earnings exceed certain limits. In this case, earnings include employment wages or self-employment net income. The amount reduced varies:  

·        Under NRA: $1 of benefits is lost for every $2 earned over $14,160 yearly or $3,150 monthly.

·        The year you reach NRA: $1 of benefits is lost for $3 dollars earned over $37,680 per year or $3,140 a month.

·        At NRA: Once NRA is reached, and individuals’ benefit is not reduced no matter how much is earned. Any benefits withheld earlier because of excess earning will be credited to the individual’s account resulting in a larger retirement at NRA.

Verify Your Records

·        Because the Social Security benefits are based on your lifetime earnings history, it is important to check your SSA records’ accuracy. The SSA sends annual statements to every worker age 25 and over. This statement includes your earnings record and the estimated benefits amounts.  

Bill Broich is a leading expert in the field of annuities. He has helped many people use and understand the benefits of annuities. Want a financial product that is immune from a faltering economy? Want to protect your savings and retirement funds? Look at an annuity. Get a free annuity booklet from Annuity.com: Free Annuity Book

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Earlier Social Security Retirement Age was fixed at sixty-five years for long, along with the option of getting premature retirement at the age of sixty-two in case an individual demanded for it. Though some benefits were accordingly reduced for them. People working in congress are given the charge of formulating various necessary aspects regarding the issue. Various informational surveys and study of social conditions have been taken into account by them before finally deciding the Social Security Retirement Age. These councils have to visualize the basic needs of people and accordingly bring out the Social Security retirement age along with the different amount of benefits that the individuals will be getting at various stages.

Social Security Retirement Age Reflects the Needs of the Community

Depending upon there personal situations people have varied preferences as far as Social Security retirement age is concerned. Some prefer to keep working for as long as possible and get the complete benefits while others may opt for getting an early break and settling off with a lesser amount of money in the process. There is another group who wants to continue working even after their specified retirement age. So various people have different visualizations and situations according to which they have their choice of how and when they want to take the final break off from work.

Social Security Retirement Ages are well specified according to the time of birth of a person. Complete benefits are offered to people born before 1973. They can opt to retire at the age of sixty-five and can enjoy full benefits. Individuals born between 1943 and 1954 have the option of going on with their work till the age of sixty-six, and reap full benefits. People born after 1960 can retire at sixty-seven taking the advantage of all benefits. Along with all the above criteria’s, all individuals have a fair option to retire at any stage, but their benefits get reduced accordingly. People also prefer to put in some extra money all the way during their tenure and get equally better amount at the later stages.

Will Social Security still be around when it’s my turn to retire?

For years the media has been telling us that the system is going “broke”. Millions of Americans are counting on these retirement benefits to help pay for living expenses during retirement, so this is obviously a great concern. Is there any truth to these rumors about our current retirement system going under?

According to the 2009 Trustees Report, Social Security retirement benefits paid out will exceed revenues starting in 2016, and the trust fund could be depleted by the year 2037. When the money in the trust fund is gone, benefits will still be paid to workers who are already collecting retirement benefits, however there will only be enough revenue (OASDI taxes paid in by people still working) to pay 76% of the benefits promised.

Most likely we will see reforms to the system such as raising the retirement age, raising the wage limit that OASDI taxes are paid on, and reduced benefits for future retirees. It’s less likely that people already collecting benefits will see their benefits lowered so baby boomers who are retiring soon probably won’t see their benefits reduced.

How much will my benefits be?

An important part of planning for retirement is knowing what resources you will have to help cover living expenses during your retirement years. Many people will rely solely on Social Security to live on during retirement; others will have pensions and/or investments to help cover living expenses. Now matter what your situation is, you need to know how much income you can expect to receive so that you can create a realistic budget for your retirement years.

The amount of your retirement benefits will depend on several factors, including when you retire, how many years you worked, how much you earned during your working years, among other factors.

The formula to calculate your retirement benefit is pretty complicated, but basically your top 35 years of earnings are averaged out and indexed for inflation to determine your retirement benefits. If you take your retirement benefits early, they will be reduced by up to 25%; on the flip side, if you wait until after your full retirement age to start collecting benefits, your benefits will increase by 8% for each year you wait.

The ssa.gov website has several calculators to help you estimate your retirement benefits, or you can review the benefit estimate statement you receive each year.

When should I apply for Social Security?

Probably the most commonly asked question is “when should I sign up for retirement benefits”? You’ve already learned that collecting your retirement benefits early will mean lower benefits for life. The question is, are you better off applying early and receiving benefits for more years, or are you better off waiting until full retirement age or later to apply?

Every situation is different, so this answer will vary depending on how long you plan on working, how much you have saved for retirement, and whether you have any other income sources (such as a pension).

How can I get the most out of my retirement benefits?

Your parents probably never asked how they could maximize their retirement benefits, but you should. Social Security is a much more valuable benefit than most people realize, especially because of the cost of living adjustment (COLA), so every baby boomer should ask this question. There is nothing wrong with using the rules to your advantage.

Will my Social Security retirement benefits be enough?

For most people your retirement benefit will not be enough to cover all of their living expenses during retirement. The purpose was never to support someone completely during retirement. It was designed to supplement other income streams (pensions and annuities) as well as your retirement nest egg. On average, Social Security makes up about 40% of retirees’ income.

However, it is still a very valuable benefit – whether it makes up 40% or 90% of your retirement income – and you should do careful planning to make sure you get the maximum benefits you and your family are entitled to.