Retirement Checklist: 6 Things To Do Before Claiming Social Security
So you're ready to take the big plunge into the golden years and retire. Congrats! This is a big step for the health and well being of your future, which you have probably looked forward to for a very long time. Now that it's here, you can rest assured in the fact that all your hard work has paid off. You hopefully have all your 401(k), pensions, and investments ready to work for you in retirement, but there are also a few things you need to do before you start to claim your Social Security funds. Before you start claiming those funds be sure you check these six things off of your list to get all squared away. Once completed you'll be well-equipped to receive those funds each month to start your retirement off on the right financial foot.
Checklist Tip #1: Find Out Your Benefit Credits
This is very important to look into. Make sure you have the right number of credits to retire and receive Social Security. It's 40 credits. You can go to ssa.gov to find out if you have the right amount of credits to qualify. Basically, you just need to have worked for a certain amount of time and made enough money to earn Social Security for retirement.
Checklist Tip #2: Check Up On Your Spousal Benefits
You may be able to get Social Security spousal benefits as well if you were married for a certain number of years (typically 10 years or more). This is true even if you are divorced from that spouse. So check in to the fact you may receive better benefits in your spouse or former spouse's Social Security benefit credits. This will often be the case if your spouse earned significantly more than you during your working years. The spousal benefit will typically allow you to claim up to 50% of your spouse's (or former spouse's) benefit as your own. Keep in mind that this does not impact their benefit.
Checklist Tip #3: Know The Application Is Online
You can complete the application for Social Security retirement benefits online at ssa.gov and the great news is that the application only takes about 15 minutes. How easy is that?
Checklist Tip #4: Make Sure You Are The Right Age
You can start to apply for Social Security retirement benefits at 61 years old and nine months (to being receiving early benefits at 62), but you won't receive the benefits usually until you are 66-67 years old depending on when your birthdate falls in the calendar year. You may defer claiming benefits until age 70 (this is that latest age to which you continue to receive delayed benefit credits).
Checklist Tip #5: Know That You Are Ready To Stop Work
This is an important one. Some people don't want to retire. That's completely up to your lifestyle, health, and comfort level. Know that continuing to work can affect the amount money-wise you receive in benefits. So it might not be worth it to keep that part-time job if it's not going to take care of you in your later years.
Checklist Tip #6: Use The Retirement Estimator
Using an online retirement estimator can go a long way into planning how much you are going to have to live on each month. Being on a fixed Social Security income is doable if you are able to plan and budget accordingly. It may mean downsizing your current living situation into something more financially manageable or paying off some debt before you are able to retire.
When you are ready to retire, if you still have questions the Social Security government site can't answer for you, make sure you chat with a knowledgeable financial advisor to help you set up your future. That way you can sail into your retirement years with greater ease!
At Lansdowne Wealth Management, we use sophisticated financial planning tools that can help project retirement income and expenses, as well as projected Social Security benefits at various ages.
About Robert Henderson and Lansdowne Wealth Management
Robert Henderson is the President of Lansdowne Wealth Management, an independent, fee-only financial planning firm in Mystic, CT. His firm specializes in financial planning and investment management for retirement, with a special focus on the particular needs of women that are divorced or widowed. He is an Accredited Asset Management Specialist and a Certified Divorce Financial Analyst. Mr. Henderson can be reached at 860-245-5078 or bhenderson@lwmwealth.com. You can also view his personal finance blog, The Retirement Workshop at http://lwmwealth.com/blog and the firm’s website at http://www.lwmwealth.com.
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