Retire at 70? No thank you!
A few weeks ago, Suze Orman wrote an article entitled This is the Age You Should Retire – Not a Month or Year Before.
And Suze’s recommend age? Drumroll, please……70!
NO THANK YOU!
Suze lays out 3 steps to make sure that you keep working to 70. In contrast, I’ve laid out 3 countersteps to make sure that you don’t.
Step 1 (from Suze) – Delay Tapping Social Security Until 70
Counterstep 1 (from Dash2Retire) – Tap Social Security when it best suits your needs
There is no one size fits all for when it is best to begin Social Security.
Full retirement age is from 65 to 67 (based on the year of your birth.) However, delaying benefits until age 70 increases your benefits by 8% per year after full retirement age. And taking benefits at age 62 (the earliest you can take benefits) permanently decreases your benefits by five-ninths of 1% for each month up to 36 months before full retirement age and an additional five-twelfths of 1% per month if you start taking benefits more than 36 months before full retirement age.
Sound complicated? It’s not supposed to be. Remember that Social Security is designed to pay out the same amount of money over an average person’s lifetime regardless of when they file for benefits.
The best place to start is the Social Security estimator.
From the estimator, you can do a break-even analysis to determine when the total of the benefits received equals the same amount under different age elections.
Once you determine your break-even age, you can make choices based on individual needs, such as:
Immediate cash needs. People with other sources of income may choose to delay benefits.
Health. If you are in poor health, taking benefits early may be the right decision.
Spousal Benefits. If one spouse significantly outearns the other, it makes financial sense for the lower earner to claim spousal benefits early and delay the benefits for the higher earner.
Income. Earned income may temporarily reduce your benefit if you take Social Security before full retirement age.
Step 2 (from Suze) – Lay the Foundation Now to Work Longer Later
Counterstep 2 (from Dash2Retire) – Lay the Foundation Now to Stop Work Sooner
People leave the workforce for a variety of reasons, some intentional and some unintentional. Many people choose to retire before full retirement age because they have accumulated enough assets to support their lifestyle without relying on an earned income. Others leave for reasons beyond their control:
Downsized at a company
Health crisis for themselves or a family member
To care for aging parents
A solid financial foundation will allow you to meet any challenge head-on. Financial independence though wealth building is the goal of this site. Getting debt under control, maximizing earnings and boosting savings are vital to building wealth.
According to Suze,
Every dollar you don’t spend in your 60s is a dollar that can keep growing for your 70s and beyond.
True enough. But the same can be said for every dollar you don’t spend in your 20s, 30s, 40s or 50s.
No matter your age or income, it’s never too late or too early to put together a plan for financial independence.
No one can predict the future. Building a strong financial foundation will require sacrifices today. But having the peace of mind that comes with a solid financial foundation is worth the sacrifice. And it will provide you with options that others, who are financially unprepared, may not have.
Step 3 (from Suze Orman) – Truly Enjoy a Secure Retirement
Counterstep 3 (from Dash2Retire) – Suze’s right on the money with this one!
As Suze says:
Having a clear-eyed vision of how navigating your 60s can set you up for a worry-free retirement should make you feel empowered. It’s the difference between holding your breath that everything will work out okay, and taking the steps today so you can confidently breathe easy knowing you have a plan that will work out just great.
On a least one point we agree. And I couldn’t have said it better myself!