Tag Archives: Retirement Funds

Don’t Make Health Insurance Mistakes

Don’t Make Health Insurance Mistakes

If possible, you should try to keep your health insurance. Not understanding the requirements and rules of your plan leaves you at risk of inadvertently losing coverage upon retirement. Many mistakenly assume that Medicare will take care of all their health care needs when they turn 65-years-old, but it doesn’t. At that time, you’ll need a Medicare Advantage Plan or Medicap supplemental policy.

Smart Investing

Your financial advisor has most likely advised you to maintain a balanced portfolio of both bonds and mutual funds. This is because taxation and inflation can take large chunks out of your income and you need a portal for long-term growth.

Understand Your Retirement Funds

You should review your retirement fund options with your financial advisor, asking as many questions as you need to understand all the options and processes.

Work With A Fee-Only Financial Planner

It’s always best to work with a financial planner to understand all the complexities of financial planning, the various options available, and what might best accomplish your particular needs and goals. Make sure that your financial advisor is fee-only, meaning they are charging you a fee for their advice. The person advising you shouldn’t be someone that may have an alternative agenda, such as selling retirement products.

Postpone Social Security Benefits

It may be better for you to draw from your IRA or 401 (k) plan before applying for benefits through the Social Security Administration, as this could mean your Social Security benefits will be higher. Typically, someone that postpones drawing benefits from age sixty-two to age seventy will see an increase of around 76%.

Postpone Annuities

Annuitization should be postponed until you’re in your early eighties or late seventies. This means the fixed monthly payments won’t have to last as long and will be more apt to cover your financial needs.

Postpone Reverse Mortgages

A reverse mortgage is a viable option for those running out of money during their retirement years, but this should be something put off as long as possible.

Think Outside The Box

Some may fall short of their financial retirement goals before or during retirement. Desperate times call for desperate measures. It may be necessary to think about communal living. Depending on family dynamics, living with your children may be a viable option.

Maximize Social Security Benefits with Three Clever Tricks

Maximize Social Security Benefits with Three Clever Tricks

Obviously, retirement brings on a host of new challenges for seniors-specifically in the financial arena. However, armed with the proper tools, seniors can ensure a financially comfortable retirement. The objective is to build a strong foundation of retirement funds that provide a steady stream of income you won’t outlive.

In the past, most seniors and their financial planners have somewhat dismissed Social Security as a powerful retirement planning tool. Although Social Security certainly offers a reliable stream of income, the amount is diminutive and the benefits have a limited range of motion.

However, between the ages of 62 and 70, there are three clever tricks seniors can use to maximize their Social Security benefits: a reset, a file and suspend and restricting an application. By employing these three strategies, seniors may be able to greatly boost their benefits. Here’s how each tactic works:

Trick #1: Do over

The Social Security reset, or do over, is a great tactic for those who regret taking a reduced benefit at the age of 62. If you wish you would have waited and received the full benefit at 65 or 66 or earned the extra delayed retirement amount by putting off retirement until the age of 70, you’re in luck: you may have a second chance.

You can “reset” your benefit amount by coming out of retirement. All you have to do is file Social Security Form 521, also called “Request for Withdrawal of Application.” You’ll have to repay all the Social Security benefits you’ve received to date (no interest or inflation adjustment included.) Then, you can reapply for Social Security at your current age. You can only pull the reset one time-once you file Form 521, it’s irreversible.

The Social Security Administration will almost automatically approve your request, and you will receive the higher Social Security benefit amount for the rest of your life. Plus, your spouse may be able to collect additional spousal or survivor benefits based on your amped up benefit as opposed to your lower “early” retirement amount.

Trick #2: File and suspend

If you are married and you and your spouse retire at different ages, you can use the “file and suspend” tactic to maximize your Social Security benefit.

For example, let’s say you have reached your full retirement age at 66, but you plan to work until 70 to receive the delayed retirement credits. (This bonus can increase your full benefit amount by 32%.) Your wife, who does not work, just turned 62. You can file for Social Security now, but request an immediate suspension of your benefits. Then your wife can apply for her Social Security benefits at your current benefit level. Your wife will receive checks at a higher amount than she would have on her own employment record, and you won’t be locked into the lower benefit payment.

Once you turn 70, you can remove the suspension and begin receiving checks at the higher delayed retirement amount. Additionally, if you save up enough money to pay back the benefits your wife received, you can reset at the age of 70. This will not only increase your benefit, but it will also boost your wife’s spousal and survivor benefits.

Trick #3: Restricting an application

The restricted application is another tactic that may increase your benefits. Let’s say Bob is 66 and plans to work until he’s 70. His wife Jenny, who is also 66, is ready to retire. Jenny won’t be collecting from Bob’s record because she has earned her full benefit on her own record.

Instead of filing for Social Security, Bob decides to “restrict an application” only to Jenny’s benefits. This allows Bob to file as a spouse on Jenny’s record and collect half of her full benefit. In the meantime, Bob can continue working and build up delayed retirement credits on his own record. If Jenny earns $800 a month, Bob will collect $400 a month-which boosts their overall benefit amount by 50%.

Then, when Bob retires at 70, he will earn a higher benefit amount for his delayed retirement credits. Once again, this will mean Jenny will collect a higher benefit if Bob dies before her.

While these three Social Security tricks can help many taxpayers amplify their benefits, these strategies aren’t for everyone. For example, let’s say you plan to collect early and reset later. What if you are unable to save enough to pay back the benefits? Even worse, what if you die before having a chance to reset? Your spouse will then be left with a meager survivor benefit.

You should take time to think things through before you employ any of these tactics. You may want to discuss your options with a financial professional, who can help you come up with the best game plan for your unique situation.

Sketch Out a Winning Retirement Gameplan

Sketch Out a Winning Retirement Gameplan

After years of toiling away in the office, you’ve finally decided to enter into your glorious retirement years. You’re probably dreaming of relaxing days, visits with the grandkids, plenty of travel and lots of free time to explore new hobbies. Not so fast—before you clock out for the last time and bid farewell to your co-workers, you’ll need to sketch out a winning retirement gameplan.

As with every other major life change, retirement takes plenty of preparation. Not only do you need to figure out how you’re going to pay the bills—you’ll also want to prepare for the emotional and mental challenges many retirees face after leaving the workforce. Once you’re retired and have more free time, you may find yourself bored, isolated and even depressed.

Here are a few steps you should take to ensure your exit from the working world and entry into retirement is a smooth transition:

· Do your boss a favor: You may be tempted to take off running from the office as soon as you announce your retirement. However, it would be beneficial to both you and your employer if you stick around and help your boss find a suitable replacement. You may even offer to help train your successor. Not only will your boss be forever grateful, but this will help ease your transition into retirement.

· Draw up a retirement budget: Before you jump into retirement, you’ll want to make sure you have enough income to last throughout your lifetime. Sit down and figure out just how much money you’ll need each month for the next 40 years in order to maintain your current lifestyle. If you don’t think you have enough money in your retirement funds to cover these monthly expenses, you may want to rethink your plans. You might consider delaying retirement, exploring an “encore” career or picking up a part-time job.

· Consider health care expenses: Even if your employer offers a retirement health plan, you should set aside plenty of funds to cover the cost of health insurance. A company can take away these retirement health benefits at any time, so you’ll want to make sure you’re covered from every angle.

· Sign up for government aid ahead of time: Sometimes, it can take 90 days or longer for Social Security benefits or Medicare to kick in for eligible retirees. If you’re 65 or older, approaching retirement and want to start receiving benefits as soon as you stop working, you should sign up for benefits a few months before your official retirement. Visit ssa.gov or call 800-772-1213 to register.

· Plan now for retirement hobbies: Boredom is one of the biggest challenges many retirees face. But if you plan ahead to stay active, you’ll be much more likely to enjoy a full, rewarding retirement. Think about some new hobbies you’d like to pursue, sign up for volunteer work, register for some interesting classes or even consider a part-time job. You may also want to find out if your company offers an “alumni group” you could join. Many businesses arrange these groups as a way for retirees to stay in touch with other former colleagues. As long as you continue to take part in meaningful activities and feel like you have a purpose to your life, your retirement will be much more fulfilling and enjoyable.