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This was on my smartphone news feed yesterday. No surprises here. This strategy is targeted at most of us.... the ones who don't have a defined benefit pension coming and who don't have a high enough net worth to replace most of our pre-retirement income.
Monthly or quarterly distributions of 401(k) & IRA RMDs at age 70 1/2. Use low cost index, balanced, and target date mutual funds.
They're suggesting either wait until 70 to retire, work part-time to cover living expenses (which may need to be dramatically slashed), or set aside a pile of cash to bridge yourself to age 70.
The problem with the delay to 70 strategy is that life often gets in the way and you need that income beforehand.
If, as the article states, SS is going to end up at 60% to 80% of a typical person's income in retirement, that's also inferring that their private savings are lackluster by comparison. They may need the income prior to age 70.
A lot of people will not be able to work that long, whether for health reasons or aging out of the workforce. My mom is 60 and has a blood disorder that could get worse, along with other health issues. Who knows if she can work that long. She'll have a little over $800/month in benefits if she takes SS at 62 in two years. If she waits until 70, that goes to over $2,000/month in expected inflated dollars in 2027. Hell, if she hangs on until 66, she gets $500/month more. Dad wants her out at 62 for health reasons, but I think that's a poor decision. That cuts way down on the income they will need later. They don't have a lot of retirement savings and will be dependent on SS, and it's important they work as long as possible to pay for current living expenses, as well to get the SS up for later.
Dad has a manual job and makes quite a bit more, but if they were to lose their current jobs, who knows what they would find around here at 60. It could be $10-$12/hr work.
You don't have to work till 70 to delay collecting until 70. Of course, you'll need the resources to survive without SS until 70. The main reason I'm waiting until 70 is to give my wife the highest possible SS check after I'm gone and she has to live on one check.
I would say the need to delay retirement until age 70 or the need to work part time in retirement are NOT "winning" strategies. The winning strategy is to live within means and to take advantage of compounding by saving even a little beginning early in life. Supplementing social security with withdrawals from investments is not exactly a novel idea.
I think what we have here is another 20 something, crank out words for cheap, writer with nothing of value to say.
I couldn't imagine working until 70, anyway mandatory retirement at my job was 65. I retired at 58 because I went to a retirement seminar who recommended retiring as young as possible and collecting ss as early as you could.
I couldn't imagine working until 70, anyway mandatory retirement at my job was 65. I retired at 58 because I went to a retirement seminar who recommended retiring as young as possible and collecting ss as early as you could.
On what basis exactly did they make that recommendation? Did it take into consideration individual situations or was that for everyone?
On what basis exactly did they make that recommendation? Did it take into consideration individual situations or was that for everyone?
Recommendation was for everyone. The retirement guy was from the Social Security Administration, another from a local university.
Anyway, Working to 70 wasn't an option, and of the 200 of so people in attendance NO ONE wanted to even imagine doing that. Everyone wanted to get out as early as possible and start enjoying life.
This strategy is targeted at most of us.... the ones who don't have a defined benefit pension coming and who don't have a high enough net worth to replace most of our pre-retirement income.
I would not say "Most" of us. I would say the majority here do NOT need to follow those guidelines. The rest may.
Not very practical advice for those who need SS sooner than later. I have an unemployed 61 year old friend who has to find work to pay her bills and she can only walk with a pronounced limp because of a worsening knee condition. She longs to retire early but can't, even if she took SS early.
There's no way I am waiting until 70 to collect SS and also start withdrawing from my IRAs. I will collect Medicare and SS at age 65, the difference between 65 and FRA 66 and 8 months is not going to break me.
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