According to a survey by the Empower Institute, the biggest concern among current retirees and retirees who soon acted during retirement. This is a good thing, especially since pensions are getting more expensive.
However, it can be difficult to save for the future, and many workers fall behind on their savings. According to a report by the Transamerica Center for Retirement Studies, the average baby boomer saved just $ 152,000 for retirement. For many retirees, the money will not last more than a few years.
If you are struggling to save, you may want to consider adjusting your retirement age. If you retire at one of these three ages, your money can help you move on.
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1. Age 62
After your 62nd birthday, you are eligible to claim Social Security benefits. Keep in mind that if you claim as early as possible, your monthly payments will be smaller than when you waited several years. However, if you plan to retire as early as possible while still stretching your savings, the benefits to your social security can help your money.
Retiring at age 62 also means you will receive early withdrawal penalties on your retirement savings. If you have a 401 (k) or traditional IRA, you will withdraw money before the age of 59 1/2 up to a 10% penalty on the amount you withdraw. So if you choose to retire early, it may be a good idea to wait until you are in your 60s to avoid fines.
2. Age 67
If you claim social security at the age of 62, your benefits will be permanently reduced by up to 30%. To receive the full benefit amount to which you are entitled, you must wait until your full retirement age (FRA).
Your FRA depends on the year you were born. If you were born in 1960 or later, your FRA is 67 years old. This means that most future retirees will have to wait until the age of 67 to claim social security if they want to avoid benefit reductions.
There is also a common misconception that if you claim early, your benefit amount will automatically increase as soon as you reach your FRA. According to a survey by the Nationwide Retirement Institute, 69% of baby boomers believe this (wrong) belief. If you fall for this myth, it can affect the age at which you start claiming benefits. So make sure you are aware of how the age you claim will affect your long-term benefit before filing.
3. Age 70
If you wait until the age of 70 to claim social security, you will receive as much as possible each month – which can give your retirement income a serious boost. If you delay benefits to your FRA, you will receive a bonus every month. If you are a 67 year old FRA and waiting until the age of 70 to claim, you will collect your full benefit amount plus 24% extra each month for the rest of your life.
Postponing benefits can be difficult for many workers, especially if you want to retire as soon as possible. But it could potentially increase your benefits by hundreds of dollars a month, which can go a long way if you run out of savings.
Remember that you do not necessarily have to retire at the same time, no matter what age you start claiming social security. However, if you retire first and then wait a few years to claim, you run the risk of tapping your savings too quickly. So 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. If you retire at one of these three ages, it may be easier to stretch every dollar into your retirement.