PreferredConsumer.com | Don't Just Buy. Know.

Retirement Planning

Retirement planning consists of various forms of savings including 401(K)s. Pension plans and social security are also usually components of retirement planning. Don’t forget to make plans to ensure that you will continue to have medical insurance if you retire or are layed off before age 65. If you retire at or after age 65, you will be eligible for Medicare, but you will need to plan to cover costs beyond what Medicare covers. Medical costs can destroy your life savings if you don’t plan in this area.

When planning for retirement, you must first decide how much money you need to live on each year after retirement. 70-80% of your pre-retirement income will give a good estimate, but many factors will come into play including the following:

How much you have saved
Were you a low-income or high-income earner
Will you own your home debt free before retirement
Your retirement lifestyle choices

Preparing for Retirement

Take care of your health throughout your life. Then in retirement, you will enjoy it.

Enjoy your family and friends. During retirement, it is easy to become isolated, and this isolation has been shown to cause physical and emotional problems.

Social Security

Social Security was designed to provide a level of retirement income to cover the basic needs including food, shelter, and clothing. However, most people could not maintain their pre-retirement standard of living with social security payments. Therefore, it is important to consider savings and employer retirement plans.

To be eligible for Social Security, you need to work a minimum of 40 quarters (3 months) by the time you reach age 62. Even if you don’t work all four quarters in a year, if you make $2,960 in a year you get credit for all four quarters of that year.

People born after 1960 are not eligible for full benefits until age 65. If you were born between 1938 and 1959, you are not eligible for benefits until age 66. If you were born before 1938, you are eligible for full benefits at 65.