A Basic Retirement Income Primer

Retirement Planning

A Basic Retirement Income Primer

Posted by COTO Insurance & Financial Services
5 years ago | February 23, 2019

Planning for retirement will require many years, and many decisions along the way. Sometimes you might even change your mind on a few of those choices, and that’s okay. There’s no way we can fit every consideration into a single blog, of course, but much of your planning will boil down to the following questions.

When do you want to retire? This answer will look different for everyone, and might be partially based on factors you can’t always control, such as your health. But do keep in mind the following basic factors as you make this decision:

  • Age 59 ½ is the minimum age at which you can access your money in a qualified retirement plan, without paying a tax penalty
  • Age 62 is the earliest age at which you can claim Social Security benefits, although the amount will be reduced from your full benefit
  • Age 65-67 is the full retirement age, at which you can claim your full Social Security benefits, and is based upon your birth date
  • Age 65 is when you can enroll in Medicare. Remember to plan for your spouse’s medical insurance, too.

What does your budget look like? Some of your expenses, such as the work-related ones, will go down. But others might increase, such as those related to travel and leisure. Then there’s the cost of long-term nursing care (a common need in retirement) to consider.

As you estimate your budget, don’t forget about inflation. The price of things today will change, perhaps drastically, in 10 to 20 years.

How long will your savings last? The average 65-year-old man today can expect to live until age 84. For a woman, the average lifespan is close to age 87. One in four of us will live past age 90, and one in ten will live past 95! A longer life is a terrific thing, but you’ll need to plan for an income that lasts that long.

How much savings can you accumulate between now and then? The prior questions can lead you to an retirement savings estimate. What do you need to do, between now and your expected retirement date, to accumulate that savings? Schedule an appointment with us, and we will discuss the options that can help you reach that goal.

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