Retirement for dummies

[ronron]

Can some one tell me what the best option is...I really havent investigated social security and retirement stuff so..here is where we are, am I correct...My D.H. turns 59 in Oct and intends to retire at 62...he will recieve retirement from his job about 1400. a mo and about 1800. a month social security...I am 52 and plan to keep working...I was born in 1958 so can I retire at 62? or do I have to keep working till 65???? I really don't know.... I have a very good job but no retirement so will depend on social security if it is still there.....also dh has medical insurance through his work that should continue and I have insurance through my work but have never used it as I am on his at no cost, either are no cost but if I were to add him to mine I would have to pay for him about 400 a month.....also D.H plans to keep working part time and has already had job offers....About retirement at what age will he recieve social security medical insurance? 62 or 65 is it better to add him to my insurance when he retires? I have heard about supplemental stuff etc.etc.etc but it is confusing. enlighten me please

[Belfrybat]

You can take early SS at age 62, but lose about 1/4th of your monthly benefits for the rest of your life. I've just turned 62, and mine is $1202., if I had waited until 66, it would be $1560.00. Medicare starts at age 65, no matter when your actual SS retirement age is.

If your DH's health insurance will continue past retirement, then I doubt it would help to also put him on your policy unless his deductible is very high and you figure you'd spend more than $400.00 a month in co-pays.

I would think the best thing to do is look at the whole situation when he or you get closer to retirement. The options may have changed by then.

[edcopp]

Originally Posted by ronron

Can some one tell me what the best option is...I really havent investigated social security and retirement stuff so..here is where we are, am I correct...My D.H. turns 59 in Oct and intends to retire at 62...he will recieve retirement from his job about 1400. a mo and about 1800. a month social security...I am 52 and plan to keep working...I was born in 1958 so can I retire at 62? or do I have to keep working till 65???? I really don't know.... I have a very good job but no retirement so will depend on social security if it is still there.....also dh has medical insurance through his work that should continue and I have insurance through my work but have never used it as I am on his at no cost, either are no cost but if I were to add him to mine I would have to pay for him about 400 a month.....also D.H plans to keep working part time and has already had job offers....About retirement at what age will he recieve social security medical insurance? 62 or 65 is it better to add him to my insurance when he retires? I have heard about supplemental stuff etc.etc.etc but it is confusing. enlighten me please

He will get medical benefits at his regular retirement age, for a fee. This age was 65 but is now a bit older for his age group.

[ronbre]

right now it is a big thing in the news daily, that the government is trying to change the retirement age and benefits..and may eliminate them..as so many baby boomers are getting ready to retire..they expect the number of people retiring to double the rolls in the next few years.

so..

you best get what you can when you can..

don't consider it welfare..it came out of your paycheck !!

get it when you can..and as soon as you can before they eliminate your chance to ever get it.

medicare won't go into effect until 65..so make sure you plan on your medical benefits..my hubby is mentallly and physically disabled and on ssd and medicare, but we have to pay around $400 a mo for his insurances..and that doesn't cover meds..but he gets those from VA.

i pay $200 for major medical and also have a small cancer ins policy..so over 1/3 of our income monthly goes for insurance/medical.

the most important thing is to make sure you are completely out of debt and have a good running vehicle when you retire..and if there are other sources of income that is also a good thing...

also make sure you are correct about those figures..they seem a bit high to me.

[Windy in Kansas]

As to amounts of Social Security you may receive you should be getting yearly print outs showing what you have paid in each year, how many years, etc.

[MoonRiver]

Originally Posted by ronron

... and about 1800. a month social security

I think $1424/month is max at 62.

About retirement at what age will he recieve social security medical insurance? 62 or 65 is it better to add him to my insurance when he retires? I have heard about supplemental stuff etc.etc.etc but it is confusing. enlighten me please

Medicare is separate from social security. It starts at age 65. Doesn't make any difference what age you start receiving social security, medicare is a different program. Many people buy a medigap program which covers what is not covered by medicare. I'm not sure of cost, but think it is $2-$3k a year. Hopefully someone who has medigap can give us a better price for it.

[Beeman]

Originally Posted by ronron

Can some one tell me what the best option is...I really havent investigated social security and retirement stuff so..here is where we are, am I correct...My D.H. turns 59 in Oct and intends to retire at 62...he will recieve retirement from his job about 1400. a mo and about 1800. a month social security...I am 52 and plan to keep working...I was born in 1958 so can I retire at 62? or do I have to keep working till 65???? I really don't know.... I have a very good job but no retirement so will depend on social security if it is still there.....also dh has medical insurance through his work that should continue and I have insurance through my work but have never used it as I am on his at no cost, either are no cost but if I were to add him to mine I would have to pay for him about 400 a month.....also D.H plans to keep working part time and has already had job offers....About retirement at what age will he recieve social security medical insurance? 62 or 65 is it better to add him to my insurance when he retires? I have heard about supplemental stuff etc.etc.etc but it is confusing. enlighten me please

Do yourself a favor and do your research at the SS site and the Medicare site. Somehow there is always confusion in the translation on a forum and this isn't something to be confused or make a mistake about.
Medicare starts at age 65 for everyone. Medicare isn't free, an amount will be deducted from your SS check for Medicare and you will also most likely need a supplement. Medicare is a little confusing and there are 4 parts to it. Some changes depending on which city/county/state you live in. If you worked and have enough credits you can retire at age 62. You should also be able to possibly increase your benefit at full retirement age if your benefit is less then 1/2 of your husband's. Full retirement age is 65+ one month for every year after 1939 you were born. Money earned while receiving SS can reduce your benefit if you earn over a certain amount. If you retire at 62 you will get a reduced benefit but the total amount received will work out the same at age 77 as if you retired at 65 but the monthly benefit will never go up.
If he has insurance that will continue why do you need to add him to yours?

[Wolf mom]

Write all your questions down and if you don't get them answered at the SS site, make an appointment & go into the office. They can do computer runs, compare SS income with retirement age, etc.

Actually, I've heard that if you take early retirement, given how long the average person lives today, you end up with a lot more than waiting until you're 66. Not the monthly payment, but overall.

[MoonRiver]

Originally Posted by Wolf mom

Actually, I've heard that if you take early retirement, given how long the average person lives today, you end up with a lot more than waiting until you're 66. Not the monthly payment, but overall.

Just the opposite. Somewhere in the early 80's, the person that retires at 66 will start to pull ahead of the one that retired at 62.

[Jolly]

Here's what I oticed in this thread: The initial poster is 52, but had no retirement other than Social Security.

Seems to me, a person can still make some positive changes before reaching 65, especially if they have a good job. Every little bit helps!

[ronron]

Jolly your right I have been thinking about putting some money into something...I will continue to get my husbands retirement if something were to happen to him and we do own our home and have savings but at this point I feel like we have some room to do more and should be just need to do some studying....thank you all for your answers everyone. Also I transposed the numbers above 1800 retirement from work 1400 SSI.

[Witterbound]

Your SS benefit will likey be 1/2 of your dh's. Talk to SS about all your options. In today's economy climate, I don't think it's a good idea to leave a job you like. Just too darn risky. 1400 a month from SS and 1400 a month from his retirement plan, for a total of 2800. Adding him to your health insurance will cost 400 a month, so his retirement is really 2400 a month. And you'll owe taxes on the 2800, so I'd guess his "take home" amount from the 2400 is more like 1800 a month. I'd bet that will be a decent cut in pay for y'all. You will be forced to keep working, because if you don't you'll both lose your health insurance and have to buy it through Obamacare, which will likely be expensive for someone in their 60's. In addition, when he is eligible for Medicare at 65, you'll still have years until you'll be eligible for Medicare at age 65. It takes a lot of planning and thinking to retire "early."

[Beeman]

Does one's pension count as income against SS? If so I'd say his pension would reduce his SS if he retired at 62, I think you're allowed about 14k before SS reduction and $1800 per mo. would go over that. Thereby any part time on the books job would almost be working for free until he's full retirement age.

[texican]

I'd recommend not depending on SS... it's a bankrupt ponzi scheme, with a good chance of having to pay off claims in hopelessly inflated fiat currency (worthless money.).

It would be wise to move to California, and become mayor of a podunk town, declare yourself King, and vote yourself an 800K yearly salary (wayyyy more than the President). Retire when the peasants realize your salary, and get a Pension for almost the same amount for life!!! Ain't life grand!

Get a govt. job, where pensions are guaranteed.

Private pensions are like passenger pigeons. Oh, wait.... pp's are already extinct.

"I" recommend lots of land, timber, gardens, orchards, lakes, self replenishing food supplies, as a retirement instrument.

[Cabin Fever]

Originally Posted by MoonRiver

Just the opposite. Somewhere in the early 80's, the person that retires at 66 will start to pull ahead of the one that retired at 62.

A couple of years ago I did the math for my SS. I assumed that I was going to live to the average age that the accuary tables says a male born in 1953 would live. I calculated the total sum SS benefits if I retired at 62 and at 65. Believe it or not, the totals were very, very similar...within just a few thousand dollars of each other. Now, if you want to assume that your lifespan is going to be longer than the average for your age, then SS starting at age 65 would provide you more total income during the remainder of your life.

[Explorer]

I did the same, Cabin. About eight years ago they were the same when one reached the "average life expediency" used by the insurance industry and also gov't. In my case that age was about 74-75 as I recall.

[silverbackMP]

Originally Posted by texican

"I" recommend lots of land, timber, gardens, orchards, lakes, self replenishing food supplies, as a retirement instrument.

And some physical gold and silver after all above is taken care of. Some dividend paying foreign stocks (think Canada, Austrailia, and Brazil) after the gold.

[sgl42]

Originally Posted by Cabin Fever

I assumed that I was going to live to the average age that the accuary tables says a male born in 1953 would live. [....] Now, if you want to assume that your lifespan is going to be longer than the average for your age, [....]

the actuarial tables for people born 1953 include the people that died prior to retirement, so that is not the proper number to use. it would be better to use the ave life expectancy for people aged 63, or whatever the retirment age you're looking at is. that will add 2-3 years to the number. a relatively small issue, compared to the much bigger issue which is, for overall retirement planning purposes, you *should* assume your life expectancy is longer than the average. more below.

Originally Posted by Explorer

[....] when one reached the "average life expediency" used by the insurance industry and also gov't. In my case that age was about 74-75 as I recall.

there is a HUGE problem with how most people interpret the "average life expectancy" numbers. because it is the "average", that means that 50% of the population will live longer than that!

so, if you make your retirement plans as if you'll live the "average age", you have a 50% chance of outliving your money. in my opinion, this is a very dangerous misuse of the number. (unless you're happy with a 50% chance of failure!)

about a decade ago, i actually used to mortality tables to figure out at what age 95% of the people had died, and 99% of the people had died. the implication is that is the target age which you should plan on if you want only a 5% or 1% chance of outliving your money.

the numbers surprised me. i don't recall exactly, but 5% of the population was still alive and kicking at about age 85-90. (exact number was something like 88). and 1% of the population was still going at age 90-95 (i think it was like 93 or 94, but again, i don't recall exactly). (also note, i did it for me, which is white non-smoking male, born tail-end of baby boom. you'd have to use the statistics and mortality tables for your age, ethnicity, etc, which might change the numbers by a few years either way.)

so, the simplistic assumption most people make is:
ave life expectancy = 74. (note: make sure you at least use the life expectancy for the people that have already reached your expected retirement age, not life expectancy of the overall pop'l.)
retire at age 63.
therefore, only have to plan for expenses and inflation for 11 years. well, true if you're comfortable with a 50% chance of failure, and having to try to be a walmart greeter at age 75! not my idea of a good time, but hey, it's your life.

so, if you want only a 5% chance of outliving your money, you need to plan for not age 75, but age 88. that is, not 11 years of expenses and inflation, but 25 years! a rather critical difference, don'tcha think?

of course, social security will keep paying as long as you live. however, i believe the SS COLAs are intentionally too low (to save the gov't money), which becomes more critical the longer you live. also, most private pensions do not have COLAs. and any savings in IRAs and 401ks has to be stretched out longer too.

and this is one of the reasons that so many people are grossly unprepared for retirement. and when they see rather large numbers for what they should have, they scoff and say that's unrealistic.

hopefully, this will prevent a few people from underestimating their retirement needs, and allow you to do a bit more work and planning now, to avoid rather difficult circumstances at an advanced age.

--sgl

[Michael W. Smith]

Originally Posted by ronron

Jolly your right I have been thinking about putting some money into something...

For people 49 and younger, they can invest $5000.00 in an IRA. For people 50 and over, they can invest $6000.00 in an IRA from employment income. If you started investing THIS year, by age 62 you would have a "nest egg" of $60,000.00 (not including dividends or interest).

Put it in a Regular IRA, and you can deduct the amount you invest against your yearly income tax form (and pay taxes when you withdraw), or better yet - put it in a ROTH IRA and pay 0 taxes when you withdraw - no matter how much your investment has grown!

My advice is to google The Vanguard Group (they have the LOWEST fees around) and research about retirement options.

[Nevada]

Originally Posted by texican

I'd recommend not depending on SS... it's a bankrupt ponzi scheme, with a good chance of having to pay off claims in hopelessly inflated fiat currency (worthless money.).

I've heard that description before, but not really accurate. The programs started as a ponzi-like program, in that many of the original recipients never paid into the system. However, the system has had plenty of time to come to equilibrium since that time.

A better description might be "a raided retirement account", since congress has seen fit to spend excess premiums that have been collected. But bear in mind that the government is still backing the pay-back promise. The idea behind Social Security is solid, based on the same idea that private retirement annuity accounts operate under. The fundamental difference is that if a private annuity administrator did to their accounts the same thing that congress is doing to Social Security, the administrators would be in prison.

There is no escaping the fiat currency argument you make, but that has nothing to do with Social Security. If you get a private retirement annuity you will still be paid in inflated fiat currency. There's not a lot you can do to avoid that.