As your retirement draws closer, you will probably start to have lots of questions such as:

  • How much Social Security will I receive?
  • When should I retire?
  • How will I know when to retire?
  • Do I have enough saved?
  • What will I need to do to maintain health insurance after I retire?

The answers to these questions can vary widely depending on your income, your job duties, and your assets. However, there are a few factors that everyone should keep in mind when you begin making your retirement decisions.

Keep reading to learn more about three key considerations relating to your future Social Security benefits.


Your Full Retirement Age (FRA)

If, like many, you are planning to rely on Social Security benefits as a key component of your retirement income, your FRA may dictate your retirement age. Those born in 1954 and earlier can reach FRA at age 66, while those born 1960 and after will not reach FRA until age 67.Claiming your Social Security benefits before you reach FRA will lower your monthly benefit for life, so it’s not a decision that should be entered into lightly.

If you like your job and can keep it through your FRA, it may make sense to do so. Not only will it increase your monthly retirement benefit, but it will also provide you with a longer earnings history and allow you to save more and/or pay off debt before you retire.


Your Health and Projected Lifespan

Your decision on when to retire (and when to begin claiming Social Security retirement benefits) can often depend on how long you expect to receive these benefits. If you have a family history of longevity, it can make more sense to put off benefits for as long as possible.

But if the opposite is true, or if you have health conditions that may shorten your lifespan, claiming benefits at age 62 instead of FRA or age 70 can ensure that you receive those benefits for at least five years longer than you would have if you had waited.


Your Retirement Budget (and Plans)

For those who have planned an early retirement, Social Security benefits may not be a major factor in the decision when to retire. But for others whose retirement budgets depend on receiving a certain amount in Social Security, it might be a good idea to carefully analyze your draft retirement budget—and even practice living on this amount for a few months—before putting in your final two weeks’ notice at your job.

Some people tend to spend more in the early years of retirement, taking long-awaited trips and undertaking home improvement projects, but eventually settle into a more regular spending pattern. In other cases, spending can accelerate significantly later in retirement if you require assisted living or long-term care. By thinking through each of the possibilities for your retirement, you will be better able to adjust your plans as your circumstances change.





Important Disclosures:

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.

All information is believed to be from reliable sources; however LPL Financial makes no representation as to its completeness or accuracy.




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