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NEFE’s My Retirement Paycheck will be retiring on Dec. 30, 2019. For more resources and tools, visit www.smartaboutmoney.org.
A retirement paycheck is a practical way to think about how you will pay yourself during your retirement years.
Click below to learn how each factor works together to optimize your retirement paycheck.
A retirement paycheck is a practical way to think about how you will pay yourself during your retirement years. Click on each icon to learn how these decision areas work together to optimize your paycheck.
How does Social Security contribute to My Retirement Paycheck?
How does Home and Mortgage contribute to My Retirement Paycheck?
How does Insurance contribute to My Retirement Paycheck?
How do Retirement Plans contribute to My Retirement Paycheck?
How do Savings and Investments contribute to My Retirement Paycheck?
How does Debt contribute to My Retirement Paycheck?
How does Fraud contribute to My Retirement Paycheck?
How does Work contribute to My Retirement Paycheck?
Taking Social Security payments too early means receiving less money each month than you would receive if you waited for even a few years. If at all possible, do not begin taking Social Security until you are at least your full retirement age. If you take Social Security benefits at age 62, your benefit will be approximately 25 to 30 percent less than if you had waited until your full retirement age. For an even bigger benefit, wait until age 70, when your payment will be at least 75 percent higher than if you started taking benefits at 62. Learn More
By working longer, you can delay taking Social Security benefits, and you also may be able to increase the size of your Social Security benefit based on additional years of earnings and/or higher wages. You'll add to your nest egg and prolong any health care coverage you may have.
A house may be your biggest asset, but be careful about viewing the value of your house as if it were your retirement plan—you still have to live somewhere! Housing prices fluctuate and you need other forms of savings. It's best to plan that a home's equity is one of the last assets you use in your retirement. Learn More
Protect your home equity from mortgage schemes by making decisions based on research. Thoroughly investigate charges, fees, and other options.
If at all possible, plan to pay off your mortgage and otherwise reduce your housing costs before retiring.
Your retirement spending plan is not complete until you know how you will pay for medical and long-term care needs. Insurance companies also sell many forms of annuities. Putting at least part of your retirement savings into an immediate fixed annuity that will give you a monthly payment for the rest of your life creates a regular source of income. Learn More
You won't become eligible for Medicare until age 65; use your or your spouse's employer-provided health care coverage as long as possible.
Understand that Medicare is not a free pass; in fact, it may only pay about half of your health care expenses. To avoid debt, have a plan to save for out-of-pocket medical expenses and premiums.
Don't "cash out" your retirement 401(k) savings before age 59½. This will always cost you money, and there are better ways to pay yourself through your retirement years, including using a rollover or keeping money in your company plan. Learn More
Working longer allows you to continue contributing to and growing your retirement plan. Be sure you clearly understand the terms of accepting early retirement incentives and lump-sum payouts in lieu of an annuity.
Use your pension as a bridge to Social Security. By delaying taking Social Security, you'll receive a larger Social Security benefit. Unlike most pensions, Social Security is indexed for inflation so you'll have more purchasing power in future years.
You do not know whether your retirement will last less than 10 years or more than 40 years. To be prepared for reaching advanced age, continue saving and making wise investments even during your retirement. At retirement, most retirees still need to invest in diversified assets that may need to last decades or help weather investment market turmoil. Learn More
Cashing out of your 401(k) savings before age 59½ usually will cost you money (in taxes and penalties) and have a negative impact on your ability to pay for your retirement.
Never forget that your retirement money is being targeted by con artists, Internet fraud, and financial scams. Never make decisions without double-checking the facts and the people you might do business with.
To maintain a predictable cash flow in your retirement years, make every effort to pay off you consumer and credit card debt before you retire, and don't borrow money during retirement unless you know precisely how you'll pay it back. Consider the 10 years before retirement as your "debt-reduction" decade. Learn More
Don't take new debt against a home but instead reduce any existing debt, if possible.
Don't "borrow" money by spending your 401(k) savings before you retire. It will have a negative impact on your ability to pay for retirement.
You've worked hard building up your retirement assets. Now you need to protect them. Older Americans-even those who are experienced with investing and are financially literate-are highly targeted by scammers, misleading advertising, and fraud, so be especially on guard. Make no money decisions quickly, and never without getting a second or third opinion from people you trust. If it sounds too good to be true, it almost always is. Learn More
Get good, objective advice from a qualified financial planner about how to best invest your assets to fit your personal situation.
If you are healthy, aim to work at least until your full retirement age. It produces many benefits, including prolonging any health care coverage you have, building your retirement assets, and increasing your ability to reduce debt. Learn More
By delaying taking Social Security, you will receive larger monthly payments over your lifetime, and Social Security retirement benefits are adjusted for inflation.
Working longer leads to increased retirement plan contributions. You will keep adding to your retirement nest egg instead of depleting it too quickly.
You will keep your healthcare benefits longer, ideally to at least age 65, when you can become eligible for Medicare.
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The My Retirement Paycheck website is provided by the National Endowment for Financial Education® (NEFE®) to assist consumers in making decisions regarding their retirement. This site is intended for noncommercial, nonprofit educational purposes only. NEFE does not provide investment advice or investment management services, nor is it affiliated with any commercial entity that provides such services.