Here are some basic guidelines to consider as you decide when to claim Social Security: Monthly payments vary a lot. You can start taking Social Security benefits at age 62, which shouldn’t be confused with age 59 1/2, at which you can take penalty-free withdrawals from tax-advantaged retirement savings accounts like IRAs and 401(k)s. But taking the benefit as soon as you can will lower your monthly payment amounts throughout retirement. When deciding when to claim Social Security, you’ll want to factor in your retirement savings, either in the form of pensions, tax-advantaged accounts or other investments. There are several different strategies for maximizing Social Security checks as a married couple: Claim and suspend. Basically, the higher-earning spouse will claim Social Security benefits at full retirement age, but suspend payments indefinitely. The lower-earning spouse can then claim a spousal benefit, while the higher-earning spouse’s suspended payments increase his or her Social Security benefit over time. Waiting until full retirement age to collect Social Security will increase your spouse’s survivor’s benefit, so it’s usually a good idea to wait until at least full retirement age to claim benefits. Deciding to keep working. But if you are below full retirement age, you will get reduced benefits if you make over a certain amount - $1,310 per month for 2017. One more thing to keep in mind is that if your benefits are withheld because of your earnings, your payments will be increased once you reach full retirement age.
While investors spend a lot of time trying to pick the right investments to build up the nest eggs that will support them in their golden years, once they actually become retirees, another conundrum surfaces. Namely, which stocks should you own in retirement?
At that stage of your life, it makes sense that you might want to minimize risk by holding shares of solid, industry-leading businesses that aren’t overvalued. So we asked three top Motley Fool contributors to each pick a stock they believe fits those criteria. Read on to learn why they think retirees would be wise to buy Lowe’s Companies (NYSE:LOW), Brookfield Infrastructure Partners (NYSE:BIP), and Express Scripts Holding Company (NASDAQ:ESRX).
Never stop (investing)
Steve Symington (Lowe’s): As Lowe’s popular tagline implies, if there’s one thing that never stops, even — and perhaps especially — in retirement, it’s home improvement. And in Lowe’s, retirees are presented with a solid company that offers acceptable income growth and a 2.1% annual dividend yield.
This year, for example, its revenue is expected to climb 5%, including contributions from 35 new stores and solid 3.5% comparable-store sales growth. On the bottom line, Lowe’s is expected to deliver 15.8% growth in adjusted earnings per share to $4.62.
We can also keep in mind that the latter number will be bolstered by Lowe’s ambitious capital return efforts; it repurchased $1.2 billion in stock last quarter alone. What’s more, Lowe’s has long held a spot on the esteemed list of Dividend Aristocrats, having increased its dividend at least once every year since it became a public company in 1961.
With Lowe’s shares trading at 15 times this year’s expected earnings — a reasonable premium given its earnings growth — I think it’s an attractive, stable portfolio candidate for investors in retirement.
A great value for a stable, dependable source of dividend growth
Jason Hall (Brookfield Infrastructure Partners): Since Brookfield Infrastructure is a master limited partnership, or MLP, it’s not ideal to buy inside a tax-advantaged retirement account. But if you’re already retired, or close to it and looking to build up a portfolio of stocks to pay steady income in a taxable account, this is absolutely one of my favorites.
To start, it’s a solid…