The recommended time
to begin thinking and planning how much money will be needed for retirement is
in the mid-30s. By the mid-40s, retirement planning is simplified because of a
greater understanding of financial resources and the ability to achieve those
financial goals at the targeted age of retirement. At age 50, it is important
to assess investment income, retirement benefits and plans for healthcare
coverage in the retirement years.
Planning for
retirement involves numerous retirement decisions in addition to compiling a
list of the available income sources needed for a comfortable retirement. These
sources will include pension benefits, Social Security, retirement accounts and
other savings. Retirement planning should also include an assessment of future
retirement risks. Examples of these risks are outliving retirement assets and
inflation. Analyze trade-offs and choices that should be made to ensure that
the retirement plan will cover all future financial obligations after leaving
the workplace. Large amounts of debt including mortgage payments will limit the
ability to save money for the retirement years.
Healthcare coverage
through employer-sponsored retiree health insurance, spousal insurance, COBRA,
Medicare and Medicaid are important considerations when planning for
retirement. Early retirement may be an option if poor health interferes with
continued employment. However, concern about future health problems should not
be a determining factor in a decision to choose early retirement.
Not all
employer-sponsored pension plans have the same features, distribution options
and method of contribution payments. It is important for future retirees to
acquire as much information as possible about each employer-sponsored benefit
plan. Employers may also be willing to consider adding in early retirement
incentives such as retiree health insurance or a bigger severance package.
Phased retirement would be an asset when it comes to deciding at what age to
retire. Phased retirement would add income from part-time or seasonal work to
the income earned from a pension or Social Security.
There is a lifestyle
choice to consider when deciding when is the best time to retire. A lower
standard of living would enable a person to retire earlier instead of
continuing to work to amass more money to support a higher standard of
retirement life. An individual might decide to retire at a younger age to care
for a loved one in poor health or to raise grandchildren. Chronological age is
not always a determining factor in deciding when is the best time to retire.
A person may want to
postpone retirement and continue working to keep busy and derive a sense of
self-worth and identity in the workplace. However, a person may desire to
retire at an earlier age to pursue a life of leisure and fun if the individual
is not happy with the daily work routine. A person’s ability to adapt to
retirement changes in lifestyle is another determining factor in deciding at what
age to begin to plan for retirement.
Researching the
various Social Security claiming-age options should also be a part of planning
for retirement. The monthly benefit amount a retiree will receive depends upon
the age of a person when filing for Social Security benefits. Starting benefits
before full retirement age will decrease the amount of the monthly benefit and
increase the period to receive benefits. Starting benefits at full retirement
age or later will increase the monetary amount of the monthly benefit and
decrease the period to receive benefits. There are limits on the amount of
Social Security benefits an individual can claim yearly between the ages of 62
and full retirement age while continuing to work and receive Social Security
benefits.
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About The
Author
Nisha Sharma
represents a site called MHA.org.uk. She enjoy and has a few years’ experience
writing about elderly health and dementia care. She enjoys reading and keeping
up to date with the latest healthcare news and developments. In her spare time
she enjoys . Feel free to visit her site for more information on specialist
dementia care.
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