As obstacles confronting those in and near retirement change, the trends affecting your sunset years inevitably shift, but there are surefire ways you can.
Here are some of the varying factors affecting how and when you retire.
Increasing Retirement Age
Starting in 2020 people who turn 62 will have to wait longer to claim their full retirement benefits. The full retirement age for those born in 1956 is 66 and four months. Those born in 1957 will have to wait two more months until they are 66 and six months. The bad news is the retirement age will further increase in 2-month increments over the next two years until the age reaches 67 for anyone born after 1960. But it may be worthwhile to work even past 67 to increase your retirement standard of living.
Some people elect to work beyond their retirement date to help alleviate some of the pressure of having enough income. The National Bureau of Economic Research has found that working until 70 can improve your standard of living financially by nearly 75 percent. The delay allows us to contribute to retirement plans and allows savings and investments more time to grow. Waiting to file for Social Security also means you’ll see a larger monthly check once you do retire.
If you’re at retirement age, there is some good news. In 2019 you’ll see bigger Social Security checks. The 2.8 percent cost-of-living adjustment will increase a single retired workers’ check by an estimated $39 and married couples will increase about $67. Although it may not seem like a lot, this is the largest cost of living adjustment since 2012. Social Security may not provide all of the income you will need to maintain your standard of living, usually only about 40% of average earnings. If you’ve not yet reached retirement age, you have time to save more and contribute to outside retirement accounts.
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