How To Prepare For The Retirement Years
Ages 25, 30, 35, 40 – save more spend less
Save as much as possible on a pre-tax or tax-advantaged basis
(Why think about retirement at these young ages? Because, with a little luck, you’ll be old someday)
Age 50 – increase savings in retirement plan by the catchup amount
Age 59 ½ - you can withdraw money from your retirement account without penalty. But unless you have a dire emergency, don’t do it. Should you withdraw money to pay for college? Try to find the money elsewhere.
Saving will give you options – continue to work if you want to, not because you have to.
Age 62 – start thinking about Social Security
Age 65 – begin Medicare planning
Age 66-67 – full retirement under Social Security
Age 70 – start Social Security if you haven’t done so at an earlier age
Age 70 ½ - begin taking distributions from IRAs and retirement plans
During the years we think of as the beginning of retirement, think about:
1. whether you want to work full-time, part-time, or not at all; and whether your employer permits it
2. whether you want to do the same kind of work, or in something similar, or completely outside of your prior employment
3. what you want to do or accomplish before your Will is probated:
4. what can you afford to do
a. review your likely expenses and sources of income
b. decide where and how you want to and can live
This type of planning recognizes:
that what you earn during your working years has to last well beyond them
that the retirement years, whenever and if you retire, require study and learning on topics you haven’t considered earlier
there are many books and websites that deal with retirement. Some of them are too general to be of real value, but at least they are a start.
that selling goods and services to those approaching retirement is a big business. Some vendors offer good value for what you pay; some try to make money by giving you less than you’re paying for; and some are out-and-out scams