Ok, Boomer, as we wrap-up National Financial Literacy Month, I didn’t forget about you. Many Boomers are hitting their retirement years and have questions about transitioning from working and earning an income, to creating your own income stream from retirement and savings accounts. Plus, when to tap the big one, Social Security, is not an easy decision. National Financial Literacy Month is a great time for you to kick-start your learning, or dive deeper into a personal finance topic you are already interested in.
Boomers need to know the lay of the land regarding their retirement accounts, how best to pay themselves, health care coverage, and as mentioned, what to do about Social Security. The last may be the biggest component of your monthly income. You need to know the best claiming strategy for you, for your situation. How and when your friend claimed may not be the best claiming strategy for you. That’s right, there are claiming strategies! Claim too soon at too young of an age and you may be giving up lots of future earnings. Conversely, if you are a married couple and one is at Full Retirement Age, or later, and claiming a benefit, it may make sense for the younger spouse to start claiming early. But which strategy; their own record, or the higher-earning, older spouse’s record? This is why it pays to have an analysis done and to know the strategy that is best for your situation. Oh, did you know… the folks who work at Social Security are not there to give you advice. They are there only to process your request.
There are a lot of old myths and confusion around Social Security. Some people think if you claim on an ex-spouse’s earnings record that the ex-spouse will somehow know, or that their earnings will be reduced. Not true! What about Full Retirement Age, isn’t it 65 for everyone? Nope! Hasn’t been for a long time now. Just for fun, take this AARP Social Security quiz and see where you stand. It’s short and some of the answers may surprise you.
How about whether your Social Security will be taxable in retirement? Well, it very well could be depending upon your other income streams. Will you still be working in retirement? Seems like an odd question, but more and more folks are actually engaging in some form of work in their retirement years. The classic image of retirement is now a quaint notion. With longer life expectancies and the need for money, many Boomers have part-time consulting jobs, or full-on gig work just to stay busy and help pay the bills.
Have you thought about how to pay yourself from your investments and savings? Many are not sure where to begin. What about guardrails? Knowing that you can set guardrails to increase or decrease your spending as needed can make things easier for you and provide a guide for annual budgeting. Which accounts do you draw from first: tax-deferred, taxable, or tax-free? Well, again, it depends on your personal circumstances. This is where some financial literacy could come in handy.
Ok, Boomer. Don’t suffer in silence. National Financial Literacy Month is the perfect time to reach out to a professional and get that advice you need. It could save you lots of sleepless nights and potentially thousands of dollars going forward. As an independent Certified Financial Planner™, I can help you establish and maintain better financial habits. Contact me and let’s get started! #talktometuesday #education #Hireaplanner #FinancialLiteracyMonth #NationalFinancialLiteracyMonth #financialsavvy #stressfree #savings #moneyeducation #financialeducation #CFPPro #OKBoomer #Boomer #SocialSecurity