Today’s Prep:
There are many moving parts in a successful retirement plan. If you’re not careful, it’s easy to gloss over key details. Eric uncovers some of the common money mistakes he sees people making.
Equipping Points:
00:55 – Common Money Mistakes: Ignoring The Future Tax Implications Of Your Retirement Savings.
- Tax rates are at all-time lows, and the current tax law will expire in 2028. While we don’t know what the future will hold, we do know that many folks don’t think through the tax implications of their investment decisions. The consequences could leave you with a hefty tax bill down the road.
3:35 – Tax Savings Put More Money In Your Pocket.
- If you can save on taxes, you can put more money in your pocket. Your advisor should be able to help you plan accordingly for your tax bill in retirement.
4:15 – Common Money Mistakes: Not Claiming Social Security Properly.
- You should always claim Social Security as part of a plan. Social Security gives you a bonus if you delay taking your benefit at your full retirement age. In other words, you can take home a bigger check if you wait longer to start withdrawing Social Security. However, this isn’t the best strategy for everyone. Neither is it the best strategy for everyone to start withdrawing at the earliest age of 62. It all depends on your situation, and that’s why it’s important to work Social Security into your overall retirement plan.
5:23 – How To Strategize Social Security.
- We have tools to help us calculate your optimal time to start withdrawing Social Security. Our estimates are based upon life expectancy. Unfortunately, we can’t predict exactly how long you’ll live. However, we can compare the merits and drawbacks of starting your benefit at age 62 versus age 70.
6:00 – How Long Do You Have To Live For It To Become A Better Deal To Withdraw Social Security At The Age Of 70?
- It’s a complicated equation, but basically, if you live beyond the age of 82, you stand to withdraw more Social Security by living off of other income and waiting until you’re 70 to begin withdrawing your benefit. However, should you die before the age of 82, you’d have been better off taking your Social Security at an earlier time.
Today’s Takeaway:
“Social Security is a crucial component of your income plan. Don’t make the decision to start taking your Social Security benefit flippantly. Work your Social Security strategy into your overall retirement plan. – Retirement Ready“
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