3 ques­tions to ask your­self as you plan for re­tire­ment

The Palm Beach Post - Neighborhood Post - Northern Palm Beach County - - Front Page - So­cial Se­cu­rity Maria Ortega is a pub­lic af­fairs spe­cial­ist for the So­cial Se­cu­rity Ad­min­is­tra­tion. If you have So­cial Se­cu­rity ques­tions, call 800-772-1213.

De­cid­ing when to start re­ceiv­ing your re­tire­ment ben­e­fits from So­cial Se­cu­rity is a de­ci­sion that only you can make, and you should make that de­ci­sion with as much in­for­ma­tion as pos­si­ble. There are a lot of im­por­tant ques­tions to an­swer.

Should you claim ben­e­fits ear­lier and get a smaller monthly pay­ment for more years? Or should you wait and get a big­ger monthly amount over a shorter pe­riod?

There are no right or wrong an­swers, but we en­cour­age you to con­sider these three im­por­tant ques­tions as you plan for your fi­nan­cially se­cure re­tire­ment: How much money will I need to live com­fort­ably in re­tire­ment?

An­tic­i­pate what your ex­penses will be in re­tire­ment, in­clud­ing things like mort­gage pay­ments or rent, util­i­ties, healthcare in­sur­ance and re­lated costs, food, per­sonal care, car pay­ments and main­te­nance, en­ter­tain­ment, hob­bies, travel, and credit card or other debt. Also, con­sider whether you’ll need to pro­vide for your spouse, chil­dren, or grand­chil­dren. What will my monthly So­cial Se­cu­rity re­tire­ment ben­e­fit be?

The av­er­age monthly So­cial Se­cu­rity ben­e­fit for a re­tired worker in 2018 is $1,404 (up from $1,377 in 2017). The av­er­age monthly So­cial Se­cu­rity ben­e­fit for a dis­abled worker in 2018 is $1,197 (up from $1,173 in 2017). As a re­minder, el­i­gi­bil­ity for re­tire­ment ben­e­fits still re­quires 40 cred­its (usu­ally about 10 years of work). The So­cial Se­cu­rity Act de­tails how the an­nual Cost of Liv­ing Ad­just­ment (COLA) is cal­cu­lated. You can read more about the COLA at www.so­cialse­cu­rity.gov/cola. The best way to get an es­ti­mate of your re­tire­ment ben­e­fit is with a my So­cial Se­cu­rity ac­count. Get yours to­day at www. so­cialse­cu­rity.gov/my­ac­count. Will I have other in­come to sup­ple­ment my So­cial Se­cu­rity ben­e­fits?

Se­cure your fi­nan­cial fu­ture with a re­tire­ment port­fo­lio that in­cludes sav­ings, in­vest­ments, and pos­si­bly a pen­sion plan. If you’re will­ing and able, you may choose to in­crease your in­come by work­ing past re­tire­ment age. So­cial Se­cu­rity re­places a per­cent­age of a worker’s pre­re­tire­ment in­come based on your life­time earn­ings. The amount of your av­er­age wages that So­cial Se­cu­rity re­tire­ment ben­e­fits re­places varies de­pend­ing on your earn­ings and when you choose to start ben­e­fits.

If you start ben­e­fits at age 67, this per­cent­age ranges from as much as 75 per­cent for very low earn­ers, to about 40 per­cent for medium earn­ers, to about 27 per­cent for high earn­ers. If you start ben­e­fits af­ter age 67, these per­cent­ages would be higher. If you start ben­e­fits ear­lier, these per­cent­ages would be lower. Most fi­nan­cial ad­vi­sors say you will need about 70 per­cent of pre-re­tire­ment in­come to live com­fort­ably in re­tire­ment, in­clud­ing your So­cial Se­cu­rity ben­e­fits, in­vest­ments, and other sav­ings.

Maria Ortega

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