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3 Things You Should Know in Retirement

3 Things You Should Know in Retirement

February 09, 2021
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While there is no clear-cut path to retirement, it’s important to consider your steps carefully. We’ve pulled together a few must-knows to help you prepare for, and enjoy, your golden years.  

 

Filing for Social Security

 

While it’s important to plan ahead for retirement, you may benefit from delaying certain tasks for a few years, such as filing for social security.  

 

At age 62, you are eligible to apply for social security benefits, even though you may not have reached your actual retirement age. By putting off filing, you can help ensure you receive the maximum amount of social security money. Your monthly social security payments increase 8% for each year that you do not claim before the age of 701, so waiting to file is optimal to help build your personal wealth and not leave any money on the table. A good financial planner will have sophisticated software to help you determine the best time to start taking benefits.

 

Required Minimum Distributions (RMDs)

 

To effectively plan for retirement, it’s important to understand what Required Minimum Distributions (RMDs) are and how they work.

 

Most retirement plans, including 401k’s, 403b’s and IRA’s, require you to withdraw money each year after reaching age 72.  The minimum amount you must take out is called the Required Minimum Distribution (RMD)2. Once the money is withdrawn, you must pay income taxes on it. A person’s RMD is based on their life expectancy as well as the amount of money in their retirement account balance, so it can be tricky to figure out the logistics of your personal plan without guidance. A good Financial Planner will help you estimate your Required Minimum Distribution and remind you of when they are due.

 

Managing Medicare

 

When considering retirement, it’s important not to forget about your health. You will want to ensure you have appropriate healthcare coverage so that you can enjoy your well-earned retirement years without worry.

 

If you are looking to retire at age 65 or older, you are eligible to receive Medicare health insurance. When deciding which Medicare plan is right for you, it’s important to understand the different types of coverage. Different Medicare plans offer varying degrees of hospital coverage, medical coverage, and prescription drug coverage - and Medicare Advantage plans often provide all three coverages3.

 

Despite the much-needed break from working that retirement offers, there often comes more work. We understand how confusing and tedious retirement planning can be, which is why we are here to help you - each step of the way. For more information on how Masonboro Advisors can help you make the best of your retirement years, please contact us directly at 910-742-0509.

 

1 https://money.usnews.com/money/retirement/social-security/articles/the-social-security-retirement-age-increases 

2 https://smartasset.com/retirement/how-to-calculate-rmd 

3 https://www.investopedia.com/articles/personal-finance/012716/how-does-medicare-work-after-retirement.asp

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The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. Please consult legal or tax professionals for specific information regarding your individual situation.