Retirement Planning

Retirement Planning - Is the "idea" of retirement...

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I. Is the “idea” of retirement changing? Are there shifts based upon certain demographics? Retirement is no longer based on the idea of the three legged stool. People today can’t expect to retire based on their savings, social security, and pensions. Most companies are now offering 401(k) plans instead of pensions. People are expected to fend for themselves more. II. It has been said, “The most important financial decision that you will ever make is your choice of spouse”. Do you agree? Yes it could be true because the credit score of your spouse could affect the interest rate you get on future loans. Also their income could change the amount of money you will have at retirement since you will be sharing your retirement fund. III. What is the “3 legged stool” for retirement? How has this concept changed for future generations? The three legged stool is your savings, social security, and pensions. This concept does not apply to current and future generations. Future retirees can not rely on social security or pension as neither could be around by the time they retire. People now are expected to invest and fend for themselves. IV. What are the requirements to receive Social Security (i.e. does everyone receive it when they reach a specified age, become disabled, or become a widow)? You must be born after 1929 to be eligible for social security. You must have 40 credits of work. Must have $1050 of earned income per quarter which is $4200 dollars a year (earns 4 credits). Basically must work 10 years in order to qualify for social security. Early retirement age is 62 and full retirement age is 67. V. What is the retirement age for Social Security? How does the monthly amount change if you decide to delay receiving benefits? When would delaying benefits be a good idea?, A bad idea? The retirement age for social security is 62 for early retirement, and 67 is the retirement age for full retirement. If you delay benefits your monthly amount will increase. Delaying benefits is a good idea when you are in good health and have good financial standing or you are still working. You would want to take early retirement if in bad health, poor financial standing, or you feel you could invest the money and earn more than the government. VI. Does working while receiving Social Security affect the amount of your benefit? How about your taxes? Working while receiving benefits can reduce your benefits if you are under the age of full retirement. If you are under full retirement your benefits will be reduced $1 for each $2 you earn. When you reach 67 it will decrease $1 for every $3 you earn and beyond 67 there is not an adjustment of benefits. There is no tax on social security benefits if you are single and benefits (benefits + earned income) are less than 25,000 dollars or married and total benefits are less than 32,000 dollars. VII.
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Retirement Planning - Is the "idea" of retirement...

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