Saving for retirement is important; however, it can also be a challenge. You have worked hard for your entire life, putting in your years, supporting yourself and your family, and would like to retire one day. Unfortunately, studies have shown that many people across the country have not been saving for retirement at all. Even those who have been saving might not be saving enough. Some people might have noticed an elderly neighbor who still has to work a part-time job. Others might be forced to move in with their children to save money on their utilities. Even though these might not be disastrous situations, the effects of delaying retirement can still kill dreams. Many people want to travel the world in their retirement; however, not planning appropriately can leave them at home counting their dimes instead. In many cases, delaying retirement by even a few months can help improve people’s retirement situations. What are some of the important factors to consider in financial planning for retirement?
The Effects of Delaying Retirement on Social Security
As people work, they pay into the Social Security retirement program. As early as age 62, people are able to draw money out of this fund. On the other hand, those who wait until later will be able to draw much more each month. Those who draw money at age 62 will receive about 25 percent less on a monthly basis than those who wait until their full retirement age. This is often age 66 or 67. It is important to think about this impact when considering the age of retirement.
The Retirement Income Planning Factor
Each year that people wait to retire, they continue to generate a substantial income. This, combined with not removing money from their retirement funds, can play a huge role. Furthermore, as people work, they also contribute to their retirement stores. This could come in the form of a pension plan, an IRA, or a 401k retirement plan. Lastly, do not forget about the benefit of having employee health insurance. Health insurance in retirement can be very expensive.
Taxes in Retirement
Yes, even when you retire, you will still need to pay taxes. Even though people who wait until age 59 1/2 will be able to withdraw from their IRA without paying a penalty, you will still need to pay income taxes on the money when you use it. A Roth IRA can help people avoid some of the taxes; however, it is important for everyone to understand the ins and outs of retirement tax planning, such as the gift tax and estate tax. Where can people look to get their questions answered?
Enroll in our Pre-Retirement Workshop
Ultimately, the question or when and how to retire can be difficult, people want to retire and enjoy their years yet also want to enjoy the rewards and benefits of their decades of hard work. In order to truly answer the question of when to retire, it is important to meet with a professional or attend a pre-retirement financial planning workshop. A fixed annuity could be the answer for you and your family. Therefore, why not attend our pre-retirement financial planning seminar, run by Fortified Retirement, and learn about 401k retirement strategies, retirement tax strategies, and make your retirement dreams come true! Enroll in our retirement seminar today!
Licensed Insurance Professional, Provides general information about insurance and retirement-related products and services, these products and services may not be specific to a particular state. Information provided on this website, in seminars or through printed or other published materials are not intended as specific legal, accounting or investment advice to an individual’s particular situation. By providing your information to us, you agree that we may contact you regarding the potential sale of annuity and/or insurance products. Information provided by Licensed Insurance Professional does not necessarily represent that of the individual professionals presenting this information. All the information presented is believed to be accurate and is secured from reliable resources, however, no guarantee is made to the completeness or accuracy of the information presented. Any opinions expressed are those of the author and the material presented is for educational and informational purposes only and is not intended as legal, investment or tax-related advice