When should you file for Social Security benefits? Many retirees struggle with that question. According to the Social Security Administration, nearly 90 percent of all workers age 65 and over rely on Social Security income.1 That means no matter your retirement plans, Social Security is likely to be a piece of your income puzzle.
However, Social Security isn’t the same for everyone. Your benefit amount is specific to your career earnings and how long you worked. Perhaps most importantly, though, your benefit amount depends on when you file your claim. Generally speaking, the earlier you file your claim, the lower your benefit is likely to be.
You can file as early as age 62. However, if you file before your full retirement age (FRA), you could see your benefits permanently reduced as much as 25 percent. Your FRA likely falls between your 66th and 67th birthdays.2
Have you created your retirement budget? A budget can be a powerful planning tool. It can help you determine how much income you may need and whether you’re on track to reach your goals. You can also use your budget to adjust your spending as needed.
Your budget may include items like housing, dining, travel and much more. You may be able to estimate these costs based on your current spending and your plans for the future.
However, there may be some costs that are unpredictable. There are others that you may not think about. Below are four surprising costs that you may not have considered while creating your budget. If you haven’t developed a plan for these costs, now may be the time to do so.
Are you concerned that you won’t have enough money for retirement? If so, you’re not alone. A 2017 Gallup study found that more than half of Americans are concerned about saving enough for retirement. That’s enough worry to make retirement America’s top financial concern for the 16th year in a row.1
The good news is that it’s not too late to catch up on your savings, even if you’re quickly approaching your retirement date. With some simple—but important—changes, you can overcome your savings gap and fund a comfortable and stable retirement.
Do you have a list of resolutions for the new year? For many, January is the time to evaluate life and make changes. Perhaps you want to get in shape or pursue a new hobby. Maybe you want to improve your relationships, further your education or travel to new destinations.
If you’re like many millennials, your resolutions may include steps to get your financial picture in order. Today’s young adults face unprecedented financial challenges. They struggle with exorbitant student loan debt, high costs of living and a difficult job market.
If you’re approaching retirement, you may be starting to think about health care costs after you stop working. Health care is a major source of expenses for many retirees. In fact, Fidelity estimates that the average retiree will spend $260,000 on out-of-pocket costs such as premiums, deductibles, copays and other medical expenses.1
Many retirees assume that government programs like Medicare and Medicaid will cover all their health care costs. That assumption is usually incorrect. Medicare is a valuable resource, but it only covers a portion of most health care costs. Some treatments aren’t covered by Medicare at all.
Are you passionate about helping charitable causes? Do you want to use your legacy to improve the lives of others? If so, you have a number of planning options available, including charitable trusts, donation of investments and outright cash gifts.
One strategy you may not have considered, however, is using existing life insurance policies to give money to a charity. It’s possible that you purchased your life insurance long ago, maybe when you got married, had kids or bought your first home. Today, you may not have the same need for life insurance coverage. Also, your permanent policies may have accumulated cash value over that time.