Everyday, people ask the same set of questions about retirement. Many of those questions have no one true answer. All too often, it comes down to a matter of opinion. These questions are asked by people who are getting close to retirement age, and for the most part, have not thought about their retirement plans all that deeply.
Good retirement plans don’t just happen a month before the big day. A good retirement plan starts with your first job, and is a priority throughout your working life. Under those circumstances, many of the most common questions about retirement just go away, as they are already factored into the plan.
These questions represent what people don’t know all the way up to the point they start asking them. So the first question to answer about retirement is, when should you start planning. The answer is, right now. Here are a few more common retirement questions and answers:
When Am I Eligible for Social Security?
The typical eligibility age for the Social Security program is 67. However, you can opt to get it sooner. Under normal circumstances, the youngest you can draw Social Security benefits is 62. But this information is not enough to make an informed decision.
What Are the Consequences of getting Social Security Early?
Benefits, in part, are based on life expectancy. So the only real consequence of opting for early retirement is the amount of benefits you receive on a monthly basis. If your full benefit amount is $1,000, it will be reduced to $700. The amount of reduction varies depending on how close your are to full retirement age. The Social Security Administration spells it out:
If you start your retirement benefits at age 62, your monthly benefit amount is reduced by about 30 percent. The reduction for starting benefits at age
63 is about 25 percent;
64 is about 20 percent;
65 is about 13.3 percent; and
66 is about 6.7 percent.
The biggest determining factor for when you should start receiving benefits might be life expectancy. If you expect to be long-lived, waiting for full retirement age best optimizes your future resources. But long-term finances are not the only consideration. If poor health is a factor, Medicare benefits might be more important than future cash.
What If I Am Disabled Before Age 62?
If you suffer a long-term disability before you reach retirement age, Social Security has a program called Social Security Disability (SSD). This program is designed to step in when a person has a long-term disability regardless of age.
While extremely helpful in that circumstance, it remains one of the toughest programs for which to qualify. Many are denied benefits on their first try. There is an appeals process that can help you get through the system. There are many attorneys who specialize in helping people successfully navigate the application process.
What should I Do After Retirement?
What you do after retirement depends on what type of retirement you envisioned. Many envision spending the remainder of their lives in play and leisure. If this is the retirement you want, you have to have a lot of money. But while that is the lifestyle presented on brochures, it is not necessarily the one you should choose.
According to the experts, the best way to die young is to opt for early retirement. It turns out we need to be needed. Many retirees become depressed because after a life of gainful employment, they no longer feel useful. It turns out that it is best for both your health and finances to keep working, even if only part time.
At the end of the day, retirement is not about the numbers. It’s about the definition. You can answer all the questions about numbers:
- What age are you eligible?
- What age is best for Social Security?
- What about finances in the event of a disability?
What really matters is how you define retirement. You don’t want to give up on life. You want to stay vibrant, active, and useful. You are the only person who can best decide how to fulfill that goal.