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needs. Set aside funds specifically for long-term
care.
MAXIMIZE SAVINGS
Establish an emergency fund for unexpected
expenses. Continue to contribute to retirement
accounts if possible. Required Minimum
Distributions (RMDs) should be calculated and
planned for.
Review subscriptions and memberships and cut
unnecessary ones.
DISCOUNTS
Senior discounts for travel, dining, entertainment
and retail can be substantial. Public assistance programs
like Medicaid, food assistance and housing
support are beneficial for those who are eligible.
ESTATE PLANNING
Ensure your will and any trusts are up to date,
and assign your power of attorney for financial
and healthcare decisions. Update beneficiaries
regularly.
SEEK PROFESSIONAL ADVICE
Consult with a financial advisor specializing in
retirement planning and use free resources offered
by non-profits.
Kerry Keihn, a partner in Pete Krull's Earth Equity
Advisors, which has a number of clients in the
Roanoke Valley, offers seven important suggestions:
1. Use budgeting tools: Leverage online budgeting
software or a simple paper worksheet to
manage your finances. Perfection isn't necessary;
the key is consistency.
2. Evaluate changing expenses: Identify
expenses that will decrease post-retirement
(like work-related costs) and new ones that
may arise (such as health insurance, travel or
new hobbies).
3. Project retirement income: Assess your Social
Security benefits, work retirement plan projections
and other savings. Consider consulting
a financial planner for a comprehensive
overview.
4. Reassess investment risk: As retirement nears,
evaluate the risk level of your investments.
Some target date funds may become more
conservative than you need, while others
THE BASICS OF
SOCIAL SECURITY
Social Security is one of the most popular government programs
in U.S. history, but it isn't always understood. Herewith is a brief
explanation of what Social Security is and how it can benefit you.
ELIGIBILITY
* Work Credits: You need at least 40 work credits,
equivalent to about 10 years of work, to qualify for Social
Security benefits. You earn up to four credits per year
based on your earnings.
* Age: You can start receiving benefits as early as age 62, but
full retirement age (FRA) varies depending on your birth
year. For those born between 1943 and 1954, the FRA is 66.
It gradually increases to 67 for those born in 1960 or later.
TYPES OF BENEFITS
* Retirement Benefits: Monthly payments based on your
lifetime earnings.
* Disability Benefits: For those unable to work due to a
qualifying disability.
* Survivor Benefits: For spouses, children and in some
cases, parents of deceased workers.
* Spousal Benefits: For spouses and ex-spouses, allowing
them to receive benefits based on the higher earnings
record.
CALCULATING BENEFITS
* Primary Insurance Amount (PIA): Your monthly benefit is
based on your average indexed monthly earnings (AIME)
over your highest 35 earning years.
* Benefit Formula: The Social Security Administration (SSA)
applies a formula to your AIME to determine your PIA.
* Adjustments: Benefits are adjusted based on when you
start taking them. If you claim before your FRA, benefits
are reduced. If you delay beyond your FRA (up to age 70),
benefits increase.
CLAIMING STRATEGIES
* Early Retirement: Benefits can be claimed at 62, but they
will be reduced (about 25-30% less than at FRA).
* Full Retirement Age: Claiming at your FRA provides 100%
of your PIA.
* Delayed Retirement: Each year you delay claiming
benefits beyond your FRA up to age 70, your benefits
increase by about 8%.
RETIRE-VA 2025 / Retire-VA.com 7
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