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3 Facts About Retirement Every Retiree Should Know

3 Facts About Retirement Every Retiree Should Know

All retirees should understand the process of starting Medicare benefits at 65, the required minimum distributions you'll need to take from your retirement accounts, and how the Social Security earnings test works. If none of the above applies to you, you'll need to take about 10 minutes and sign up for Medicare on the Social Security Administration's website (or you can apply at your local Social Security office or over the phone). You might need to start taking larger withdrawals from your retirement accounts If you don't need the money in your retirement accounts, it may seem like a good idea to leave it alone or just withdraw a little bit. This rule applies to pre-tax retirement accounts, such as traditional IRAs and most 401(k), 403(b), and 457 accounts. Basically, the RMD rule says that after you reach 70 1/2 years of age, you need to start withdrawing at least a certain amount of money from your account(s) each year. You have until Dec. 31 each year to satisfy your RMD requirement, with the exception of the year you turn 70 1/2, in which case you have until March 1 of the following year. This isn't true, but the Social Security "earnings test" can result in some or all of your benefits being withheld if you haven't yet reached full retirement age. Specifically, in the eyes of the Social Security Administration, beneficiaries who work are divided into three categories: If you will reach full retirement age after 2017, $1 of your benefits will be withheld for every $2 you earn in excess of $16,920 ($1,410 per month). If you will reach full retirement age during 2017, $1 of your benefits will be withheld for every $3 you earn in excess of $44,880 ($3,740 per month). You can work and earn as much as you'd like, and you'll still collect your full Social Security retirement benefit.