A survey by Empower Institute (Empower Institute) shows that among current retirees and those who are about to retire, running out of money after retirement is the biggest worry. This is indeed a worrying issue, especially considering that retirement is becoming more and more expensive.
However, it will be difficult to save money in the future, and many workers’ savings have fallen behind. In fact, according to a report by the Transamerica Retirement Research Center, the average income of baby boomers is only $152,000. For many retirees, the money will not exceed a few years.
If you are trying to save, you may want to consider adjusting your retirement age. And retiring at one of these three ages can help your money go further.
1. Age 62
After reaching your 62nd birthday, you are eligible to start receiving social security benefits. Remember, however, if you file a claim as soon as possible, your monthly payment will be less than if you waited for a few years. However, if you plan to retire as soon as possible while still saving your savings, then Social Security benefits can make your money last longer.
Similarly, retiring at the age of 62 means that you will not face a fine for early retirement savings. If you have a 401(k) or a traditional IRA, withdrawing before the age of 59 1/2 will result in a 10% fine on the amount you withdraw. Therefore, if you choose to retire early, it is best to wait until you are in your 60s to avoid the fine.
2. 67 years old
Applying for Social Security at the age of 62 will permanently reduce your benefits by up to 30%. In order to receive the full benefit amount you are entitled to, you need to wait until your full retirement age (FRA).
Your FRA depends on your year of birth. If you were born in 1960 or later, your FRA age is 67 years old. This means that most future retirees will have to wait until 67 to receive social insurance if they want to avoid reducing benefits.
There is also a common misunderstanding that if you file a claim early, your payment will automatically increase once you reach the FRA. A survey by the National Retirement Institute shows that up to 69% of baby boomers have this (false) belief, and falling into this myth may affect the age at which you start applying for benefits. Therefore, before filing a lawsuit, make sure you know how the required age will affect your long-term benefit amount.
3. 70 years old
If you wait until you are 70 to start applying for social insurance, you will get as much income as possible every month-this can greatly increase your retirement income. When you defer benefits beyond your FRA, you will receive monthly bonuses. If your FRA is 67 years old and you wait until 70 years old to receive it, you will receive the full compensation and an additional 24% per month for the rest of your life.
For many workers, deferring benefits can be difficult, especially if you are anxious to retire as soon as possible. However, it can bring you hundreds of dollars in monthly income, which can be of great help if your savings are insufficient.
Remember, no matter how old you start receiving social security payments, you do not have to retire at the same time. However, if you retire first and then wait a few years to file a claim, you may waste your savings too quickly. Therefore, in many cases, it makes sense to retire and claim benefits at the same time.
Choosing when to retire is a big decision, and it is important to take it seriously. By retiring at one of these three ages, it may be easier to extend every dollar of pension.