By Scott Will
Everyone wants to retire and live a life of luxury. Make no mistake, there’s absolutely nothing wrong with that desire. Just be aware that you may not get what you want if you don’t plan ahead and take the right steps during your working years. I’m going to give you some excellent advice from experts like Robert Nico Martinelli regarding retirement planning.
Keep on working as long as you can. Yes, that’s a very popular sentiment nowadays, and it makes a lot of sense on a variety of levels. The more years you work, the more money you’ll have to fund your retirement years. More importantly, however, is the added value you can bring to whatever company or organization hires you.
The more years you work, the more valuable your organization will see in you and your efforts. That means they’ll provide a better salary and benefits package to an experienced long-term employee than they would to someone who is just starting out in their career. The business world values experience, so if you have it use it.
Don’t retire too early. There’s no rule that says you have to retire at a certain age, but there are rules governing the collection of Social Security benefits. If you want to receive full SSA benefits, you should be at least 62 years old and should not continue working if your income exceeds $15,120 annually (in 2014).
Also, if you retire before your full retirement age (which varies according to birth year), your benefit amount will be permanently reduced. You can receive benefits as early as 62 or as late as 70, but the closer to 70 you retire, the more money you’ll receive each month.
Keep in mind that once you start receiving Social Security benefits, there are penalties for retiring early or working too long. Your benefits could be reduced by as much as 30 percent if you start receiving them at the age of 62 and work until 70. This is why it’s important to file for your Social Security benefits before the age of 70.
Be sure that you’re realistic about how long your retirement savings will last. According to the Employee Benefits Research Institute, more than half of retired workers began collecting Social Security benefits at the age of 64. According to an analysis by Fidelity Investments, in 2013, people who retired at 65 had a 49 percent chance of running out of savings before they died.
So you see that even if you start taking Social Security benefits early, you might still need to save additional funds for retirement. It’s better to be safe than sorry if your savings don’t last as long as you do, so make sure the money is there before you retire.
Be sure that you’re realistic about how much money you’ll need during your golden years. According to Fidelity Investments, several factors determine how much you’ll need. For example, if you retire at 65 and live to be 88, you’ll need $220,000 more than the cost of living each year. But if you retire at 55 and live to be 90, you’ll need $390,000 more than the cost of living each year.
