When Should Seniors Retire?
Cincinnati elder law attorneys provide help to clients with making plans for a secure retirement. While retirement should be a time to look forward to, many seniors are concerned about their future financial stability. In fact, according to a study conducted by Allianz Life Insurance, 63% of seniors fear running out of money during retirement more than they fear death.
Making a retirement plan can help you to alleviate your fears and can help you to ensure you do not run out of money before your retirement ends. Zimmer Law Firm can help with the planning process to ensure that the money you saved is safe from nursing care costs. To find out more about how we can help you, give us a call today.
When is the Right Time to Retire?
One of the key issues for seniors is deciding when the right time to retire is. The answer to this can differ dramatically from person to person because every senior has different experiences and is in a different financial situation. There are a number of key considerations to think about when deciding what the right time is for you. For example, when you are deciding when to retire, you should consider:
- If you’ve worked enough years for Social Security: You have to earn work credits in order to claim Social Security on your own work record, although you can claim benefits on a spouse’s work record if your spouse earned more or worked longer than you did. Your Social Security benefits are also based on a formula that determines your average wages over your highest 35-years of earnings. If you didn’t work for a full 35 years, the Social Security administration will average in $0 wages for however many years short you are. This can lower your total benefits, so you may want to think about working for a little longer to earn 35 years of wages.
- How your age will affect Social Security benefits. When you retire, you may get a reduced or an increased benefit depending upon whether you are retiring before full retirement age (FRA), after full retirement age, or at full retirement age. For people born in 1960 or later, FRA is 67. If you retire before 67, benefits are reduced by an amount equal to 5/9 of 1% for the first 36-months early and an additional 5/12 of 1% for each month before that. If you retire after FRA, benefits are increased by an amount equal to 2/3 of 1% per month you wait until you reach age 70 and there aren’t any more benefits increases. You’ll need to consider what benefit you’ll get at the age you retire and how that could compare to benefits you’d get if you waited.
- How much savings you have: You’ll need investment income to support you as a senior because Social Security benefits are generally too low to live comfortably on. You can invest in a 401(k) if you have one at work to invest with pre-tax money. You may also be able to invest in a traditional or a Roth IRA. A traditional IRA makes it possible to invest with pre-tax money while a Roth IRA allows you to invest with after-tax funds so you can withdraw money tax free as a senior. Zimmer Law Firm will explain the rules for when you can invest in an IRA and will help you to understand how this type of account can work for you.
Getting Help from Cincinnati Elder Law Attorneys
Cincinnati elder law attorneys at Zimmer Law Firm can help you, give us a call at 513.721.1513 today or join us for a free seminar.