If you are older than 50, retirement may be something you can’t wait for. In fact, you may think it’s long overdue.
Perhaps you’ve stashed money away in a retirement fund, planned for the long term with prudent investments and decided long ago that you were not going to rely solely on Social Security benefits.
Is it time to take the money and run? Maybe — if you are sure that your retirement income will be substantial enough to support the post-career lifestyle you want.
Retirement can actually increase your expenses. Seen as a time for more travel, more leisure, more possessions and more disposable income, retirement is what nearly every working person dreams about.
“Retirement,” however, is synonymous with “fixed income.” You don’t want to spend so much that you are dipping into your principal just to make ends meet.
That’s not a “no fun” approach to life after your career. Just make sure that your retirement fund is an investment that will provide you a monthly return sufficient for your lifestyle. Dedicate separate savings for vacations, boats, whatever.
Examine the returns on your savings plan; then look at the market. It doesn’t hurt to roll your money over into a plan that maximizes growth but is within your risk tolerance as an investor. Check with your tax adviser, accountant or financial planner about tax questions and risk factors. Bear in mind the difference a few percentage points can make. For example, $100,000 invested at a modest 8 percent will earn $46,900 in just five years, but just a 2 percent increase (to 10 percent) will mean $61,100 during the same period.
Social Security retirement benefits are part of your financial equation.
The Social Security Administration (www.ssa.gov) has an online calculator that will estimate your monthly payment.
There are three different calculators:
*Quick calculator: It provides rough estimates of your retirement benefit at three different retirement ages. These estimates will indicate the effects of early and delayed retirement. It also provides estimated disability and survivor benefits if you become disabled or die.
*Online calculator: If you have a record of your earnings and are close to retirement, there is an interactive benefit program. You will need to enter your earnings for each year. The Social Security Administration says that entered data is secure.
*Detailed calculator: To use this program, you need to install it on your computer. According to the administration, this program is the most powerful of the three and is capable of computing any type of Social Security benefit.
Also, know when to apply for your retirement benefits. Generally, you should apply for retirement benefits three months before you want payments to begin. Even if you have no plans to receive benefits because you plan to continue working, you should still sign-up for Medicare three months before age 65.
You can apply by calling a toll-free number: (800) 772-1213. Representatives can make an appointment for your application to be taken over the telephone or at any local Social Security office.
When you apply for benefits, you will need the following information: Social Security number; birth certificate; your W-2 forms or self-employment tax return for last year; military discharge papers, if you had military service; spouse’s birth certificate and Social Security number, if he or she is applying for benefits; children’s birth certificates and Social Security numbers, if applying for children’s benefits; proof of U.S. citizenship or lawful alien status, if you (or a spouse or child applying for benefits) were not born in the United States; and the name of your bank and your account number so your benefits can be directly deposited.
A person who meets all other requirements for entitlement can receive benefits beginning with the first full month when he or she is age 62. However, if benefits begin before age 65, they are reduced to account for the longer period over which they will be paid.