More than half of Americans age 40 and up expect to continue doing paid work after retirement, according to TD Ameritrade. This includes 86% of people in their 50s, while a remarkable 92% of people in their 40s expect to keep working after dialing back their main career. If you plan to work into your retirement years, financial advisors say there are a few factors to keep in mind.
Hold off Drawing Social Security
Drawing Social Security earlier than full retirement age (that’s 67 years old for people born in or after 1960) reduces your monthly payment, so conventional wisdom says you should wait until full retirement age to claim if possible.
If you plan both to earn income and draw Social Security between the ages of 62 and when you reach full retirement age, take note: For that period of time, your Social Security benefits will drop by $1 for every $2 earned above $17,640, and $1 for every $3 earned above $46,920. These deductions stop after you reach full retirement age.
If you work for a big company
The general rule for workers at companies with at least 20 employees is that you can delay signing up for Medicare until you lose your group insurance (i.e., you retire). At that point, you’d be subject to various deadlines to sign up or else face late-enrollment penalties.
While everyone’s situation is different, there’s a good chance your current insurance through work is a more cost-effective option, said Danielle Roberts, co-founder of insurance firm Boomer Benefits in Fort Worth, Texas.
This may be due to lower premiums and other cost-sharing aspects such as copays or co-insurance, or lower costs for prescriptions under the group plan.
Do the Medicare Math
How much you earn also impacts how much you pay for certain parts of Medicare. “Your Medicare Part B premium is based on your taxable income,” Russell says. An individual with an income of $87,000 or less pays $144.60 a month in 2020 for Part B, but someone with income from above $87,000 up to $109,000 pays $202.40 a month. The highest monthly premium, for individuals making $500,000 or above, is $491.60 (Note that your 2020 Part B premium is based on your 2018 income.)
Fresno Financial Planner Takeaways
When it comes to Fresno retirement planning Soutas Financial puts your future first.If you plan to work into your retirement years, financial advisors say there are a few factors to keep in mind.Drawing Social Security earlier than full retirement age (that’s 67 years old for people born in or after 1960) reduces your monthly payment, so conventional wisdom says you should wait until full retirement age to claim if possible.until you lose your group insurance (i.e., you retire). At that point, you’d be subject to various deadlines to sign up or else face late-enrollment penalties.
Diversifying your retirement assets among a variety of vehicles and alternatives—both insurance and investment oriented, depending on what is appropriate for your situation—may offer you a better chance of meeting your retirement income goals throughout your lifespan. We help our clients with problems sometimes associated with retirement such as stopping spend down and avoiding probate. In doing so we leverage Medicare long term care as well as risk management designed to help accomplish those goals.
When searching for Fresno financial advisors, look no further than Soutas Financial & Insurance Solutions Inc. your Fresno retirement planning advisor is committed to helping take the complexity out of retirement planning. By using a variety of insurance and investment strategies that focus on Asset Protection, Long-Term Care Strategies, Legacy Planning Tax-Efficient Strategies, IRA, 401(k) & 403(b) Rollovers, Life Insurance, Annuities, Medicare, we can help you develop an overall retirement income strategy specific to you and your family. We have a strong team of professionals helping ensure you receive all the assistance you need not only in developing your retirement income strategy, but in maintaining it throughout your retirement. Contact us today at 559-230-1648 or visit us today at Soutas Financial to get your retirement plans on track for success!
Investment advisory services offered only by duly registered individuals through AE Wealth Management, LLC (AEWM). AEWM and Soutas Financial & Insurance Solutions, Inc. are not affiliated companies. California Insurance License # OK48173
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333 W. Shaw Avenue Suite 106
Fresno, CA 93704
We are an independent firm helping individuals create retirement strategies using a variety of insurance products to custom suit their needs and objectives. Investment advisory services offered only by duly registered individuals through AE Wealth Management, LLC (AEWM). AEWM and Soutas Financial & Insurance Solutions, Inc. are not affiliated companies. California Insurance License # OK48173. This material is intended to provide general information to help you understand basic retirement income strategies and should not be construed as financial advice.
The information contained in this material is believed to be reliable, but accuracy and completeness cannot be guaranteed; it is not intended to be used as the sole basis for financial decisions. If you are unable to access any of the news articles and sources through the links provided in this text, please contact us to request a copy of the desired reference.
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