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retirement

Social Security Payout: It Pays To Wait

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It’s the end of the year, and typically people think about a number of things: New Year’s resolutions, focusing on their health, planning a trip and whether they are going to retire or not. My cousin Don recently bought a new home for himself and his wife closer to his kids in Georgia. His wife moved, but he is still working near Pittsburgh and deciding if he should commute on weekends or just retire. He will be 62 this coming March.

Most of us have been paying into our Social Security since we started our very first job. It is the most common fallback for retirement for many people, but tapping into it too soon can be problematic. For instance, most people know that waiting past age 62 until full retirement age will increase their benefit amount, but do you know by how much? When it comes to Social Security, not understanding the details can lower your benefits for the rest of your life.

Here are some of the basics:

1) It pays to wait. For someone born January 1, 1960 or later, the highest monthly payout would optimize at age 70 with 24% more of the benefit. It drops back the earlier you tap in, example 100% of benefit beginning at age 67 and only 70% benefit if you take it at age 62. Big difference, isn’t it?

2) Survivor Benefits. A person can collect survivor benefits when a spouse dies, but the same rule above applies. You will maximize the benefit by claiming it at retirement age or later.

3) Divorced? Yes, you can still collect within certain guidelines. Spousal benefits are available to unmarried ex-spouses if the couple had been married at least 10 years. It pays to know your former spouse’s work record. Sorry to those of you who thought this was true at five years. It is not.

4) Quarterly statements. Pay attention to your quarterly SS statements, which are meant to keep you on track and help you estimate your payout.

5) Educate yourself. There are resources for you to help answer additional questions as you plan your retirement, such as Social Security for Dummies, available at most local bookstores or online. AARP has done a great job of putting together some helpful sites: aarp.org/ssqa to answer your questions or aarp.org/socialsecuritybenefits to help you estimate how much you will receive.

The bottom line: knowing what you are eligible for, coupled with accurate information about your Social Security benefits, is sure to put you on the road to a long and happy retirement.

Post-Retirement Blues

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Lately I’ve thought a lot about retirement and how great it would be to sleep-in knowing there was no one place I had to be every day. Many of my neighbors have taken the leap and say they are bored, and that retirement isn’t all it’s cracked up to be. One commented that retirement means that overnight, you have no job, no structure, no social interaction with co-workers and lots of free time, leaving many seniors feeling bored, depressed and without purpose.

I can’t imagine someone who has retired being anything but ecstatic, free to spend every day doing all those things they didn’t have time to do while working. However, I’m hearing from neighbors that most of them are jealous of me and feel I’m the lucky one because I’m still working. My neighbor Allison said that she feels lost and detached from life as she once knew it. Another says he doesn’t believe retirement has to be a bad thing and that it is up to the retiree to plan ahead. Here are a few suggestions to plan ahead:

  1. Find a part-time job doing something you enjoy, that you always wanted to do but never had time to do while working full-time.
  2. Share your knowledge; some colleges and technical schools like to employ people who have a lot of real-world experience, even if they don’t have teaching experience.
  3. Learn a skill or start a hobby. Many of us have skills and/or hobbies that we wish we’d picked up but never got around to because of our full-time job. The free time that comes with retirement will allow you the opportunity to explore something new.
  4. Volunteering offers so many possibilities that you might feel overwhelmed, but some things may seem a natural fit if you consider your interests.
  5. Traveling as a senior has its perks as there are often discounts available for hotels, airfare and rental cars.

The way I see it, retirement is what you make it. Allow yourself time to just stop and NOT get up and out to smell the roses. Take some time to figure out what it is you would like to do and go for it. You’re the boss now. Your time is all yours, so make every second count. Do all the things you wanted to do while working, but never had the time.