Did you start thinking about retirement the minute you woke up on January 1? If that’s true, before you hang up your spurs, take the time to consider some critical parts of retirement planning, as outlined in the recent article, “Should You Retire in 2018?” from The Motley Fool.
How are my savings? While there’s no magic number, the general rule says you should try to have 10 times your ending salary saved before you retire. Most retirees need around 80% of their former income to live comfortably. One savings tactic is to contribute to a 401(k). If you stay on the job a few years longer and max out during that time, you’ll have extra cash in retirement and avoid tapping your nest egg sooner.
Full Retirement Age for Social Security? If you’re planning to fall back on Social Security benefits in retirement, you’ll need to think about whether retiring in 2018 will hurt you from a Social Security standpoint.
If you wait until your full retirement age to take benefits, you’ll collect the exact amount you’re entitled to, based on your work history without a reduction or boost. However, if you file for benefits early, you’ll lower your payments by a certain percentage for each year you collect them before full retirement age.
If you delay taking Social Security past full retirement age, you’ll accrue delayed retirement credits that give your benefits an annual 8% boost.
If you’re thinking of retiring this year, calculate how your age might affect your Social Security payments, and make a smart decision based on that calculation.
Plans in place? While retirement is often thought of as a time to relax, travel, and enjoy life, many seniors find themselves bored, restless and even depressed. Before you decide to retire this year, consider how you’ll actually spend your time, once you no longer have a job.
If you’ve done the heavy lifting of planning, both for the financial and emotional aspects of retirement, it can be a very fulfilling time of your life. However, if you don’t really know if you can afford to retire, or if you have no idea what you want to do with your time, you’re simply not ready. It may be best for you to keep working, especially if your job is rewarding and socially enjoyable, and start planning.
As always, whenever any major life changes occur, we encourage our clients to keep us informed so that we can keep your estate plan in alignment with any such changes in your life.
Reference: The Motley Fool (January 7, 2018) “Should You Retire in 2018?”