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Do you plan to work until age 70? There are benefits | Deal



When it comes to retirement, later it may be better.

Americans consider 65 to be the age to stop working. Social Security considered full retirement age for many Medicare benefits and historical practice had established it as the goal.

Now some experts suggest that people put their sights a little higher: at 70.

right? Working a few more years or taking out Social Security benefits later can significantly increase income. This is particularly important since fewer workers receive pensions. Americans have largely assumed the responsibility of saving for retirement, often failing to do it properly.

"We continue to add years of life and everything was added to the retirement period and never changed the retirement age," he said. Steve Vernon, researcher at the Stanford Center on Longevity in its financial security division.

As such, Vernon and his colleagues analyzed nearly 300 different retirement income methods and found that the best approach for middle-income retirees is to have a reliable service. Source of income through retirement is to wait until age 70 to claim Social Security, which is when the benefits reach their peak. They must also use the minimum distribution calculation required to determine how much to draw from their personal savings, such as a 401 (k) or an IRA.

The RMD is the minimum amount that the IRS says it should take out of retirement accounts each year once it reaches 70 and a half years.

This approach, called "Spending Safely in Retirement Strategy," in effect "pension" to common retirement accounts such as a 401 (k) or IRA. It will not compensate for inadequate savings but will help obtain as much revenue as possible from existing sources.

For it to work, some retirees may have to significantly reduce their living expenses.

Vernon said it is a direct way for middle-income workers with savings of between $ 100,000 and $ 1 million to generate a lifetime income stream. He estimates that this group represents as much as half of all workers over 55 years of age. And workers need help, since most will not consult a financial planner and few will calculate how much they will need.

"You can not just fall into retirement, you have to take it into account," he said. [19659002] Americans generally retire at age 63 and begin to collect Social Security between 62 and 64 years, according to a study by The New School.

Stanford researchers estimate that Social Security benefits represent up to two-thirds of an average retiree's retirement income if they start drawing at age 65. If they wait until 70, it represents up to 85 percent, according to the Stanford research.

While working for so long is expensive for some, it does not have to be at full speed.

Some workers will need to work "enough", either in their current field or another, to pay for living expenses up to 70 years of age in order to postpone Social Security benefits. It works better if a retiree waits until age 70 because that's when the benefits reach their peak, but it still has advantages for those who retire at the end of the 60s.

"In essence, 70 is the new 65", says Vernon's report. [19659002ElexpertopersonalfinancesSuzeOrmandescribedthatyouwouldhavetowaituntil70toretireto"one-size-fits-all"otherssaythatalaterretirementisagoodideaforsomeemployeeswhofeeltheyareinasituation

Anyone who is a little behind in their savings, even just a year late, can make a big difference, "said Dan Keady, chief financial planning strategist at TIAA. put a number, but the concept of working a little more is important. "

The original idea of ​​retirement was a few years of dignity before dying when you could not work, according to Vernon. The golden years did not take hold until the last half of the 20th century.

When the United States began introducing private pensions and federal programs, many used 65 years as retirement age, so when Social Security appeared in 1935, they analyzed the common practices and decided that 65 also seemed reasonable.

The problem is that it stalled.

Meanwhile, people started living longer, pensions became less common and Americans had to manage their own retirement savings with more years to pay.

As a result, some Americans are trying to work longer.

The labor force participation rate, which is a measure of those who work or seek work, for the age of 65 and over was 10.8 percent in 1985. The rate has increased incrementally almost every year since then as of this March it was 19.5 percent.

And a recent survey by Willis Towers Watson of nearly 5,000 employees found that 37 percent of employees expect to work beyond 70, compared to 30 percent two years ago.

"Financial pressures are forcing many employees to retire later," said Pat Rotello, senior consultant at Willis Towers Watson. "Employees with monetary concerns are more likely to continue working after the normal retirement age to maintain their income."

However, these tactics are often easier to say than done.

Workers often retire earlier than planned due to health problems, layoffs or demands for care, said Theresa Ghilarducci, an economics professor at The New School. According to experts, older employees are also expelled.

Those who wish to work in their later years sometimes have difficulty finding a job. AARP vice president of programs, Jean Setzfand, said age discrimination becomes very real since the age of 45.

And, says Ghilarducci, these extraction strategies work only for those who have something saved, while many They have nothing. [19659002] "The feeling that 70 is the new 65 is not true for the vast majority of workers, it's not even an option," he said.

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