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What's Your Retirement Dream?

What's Your Retirement Dream?

October 06, 2021

65 is the new 55!

Advances in medicine, technology and nutrition have added nearly 10 years to American life expectancy over the past few decades. While formal “retirement age” hasn’t changed much, expectations around retirement sure have! Gone are the days of taking early retirement and then simply biding your time. For some, retirement may be something they do two or three times as they try new jobs and adventures!

Baby boomers have made it clear they aren’t interested in slowing down. But what effect does working longer have on Social Security benefits? How is your retirement income strategy impacted by extending your employment? And what are some of the considerations around working longer?

Impact on retirement income strategy. More earning time means more money will be funneled to your retirement accounts. There’s very little downside here, as every dime can help fund the lifestyle you want. So if you have the desire to work – go for it!

Impact on Social Security benefits. If you intend to work more than just part-time,you may want to wait to collect your Social Security benefits until you reach full retirement age.. Full retirement varies between 65 and 67, depending on the year of your birth.

What if you decide to take Social Security early, between ages 62 and 65? Until you reach your full retirement age, your benefits are reduced by $1 for every $2 you earn in excess of $18,960 for 2021. But in the year you reach your full retirement age, your benefits will be reduced by $1 for every $3 that you earn above $50,520 for 2021. The formula is pretty confusing, so if you’re trying to balance your Social Security benefits with a paycheck, then it may be time to contact our office to talk through your plan.

The simplest advice is to wait to claim Social Security until your full retirement age. That way, you’llget full benefits and still work as much or as little as you want, without affecting your monthly Social Security check.

Considerations of working longer. The decision to work is ultimately a personal one: will you work for yourself or find a salaried position? Are you comfortable commuting to an office, or would you prefer to work from home? Are you okay sticking to a schedule, or do you prefer greater flexibility?

Tax and Social Security shouldn’t be the only factors in deciding if extended employment or a second career is right for you. If you’re motivated to work, our team can adjust your plan to accommodate your wishes.

Ready to talk about the next phase in your journey? Connect to my calendar today to schedule some time to review your household’s financial plan. I look forward to the conversation!

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