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.
When it comes to managing finances, many people struggle to keep up with expenses like rent, utilities, credit cards, and student loans. With so many obligations, saving for retirement becomes less of a priority. In fact, according to a 2016 GoBankingRates survey, one in three Americans have no retirement savings at all. (See also: 7 Retirement Planning Steps Late Starters Must Make)
If you haven’t started saving yet, or your retirement account isn’t enough to provide for you, you may be thinking of an alternative strategy. Many people plan on working well into their 60s or 70s rather than depending on their retirement accounts for income.
However, while many people expect to work at least part-time through their retirement, it doesn’t always go according to plan.
While you may expect to be strong and healthy well into your 70s, the reality can be quite different. Your health may deteriorate suddenly, requiring medical attention and rest. Or, you may experience an accident which limits your mobility. You may be physically unable to work, even on a part-time basis. If you relied on working into your retirement to fund your lifestyle, a health emergency can leave you destitute.
When it comes to retirement, you should save with the idea that you may not be able to work at all later in life. If you are healthy in your golden years and…