Although retirement may seem far off for many individuals, it can sneak up on you much faster than you would like. It is important to start planning for retirement in advance, especially if you are 40 years of age or older. Today’s retirement benefits are smaller than ever, so it is important to have alternative sources of income to help you get through your golden years.
Creating a budget
The first step in retirement planning is to create a budget. How do you want to live as an older person? Do you want to live minimally, or are you hoping to have enough funds to support a plentiful lifestyle?
The Social Security office has a retirement planning guide that you can use to help determine certain aspects about your retirement. The guide includes information about how many benefits you might expect to receive, what your potential government income will be, and how much you will need to save to ensure a certain quality of life.
Applying for Social Security Benefits
The SS office recommends that you apply for retirement benefits about three months before you want your benefits to begin. If you apply for late social security benefits, your monthly payments will be higher than if you start pulling from social security at a younger age. You can use the Retirement Age Chart to find out what your full retirement age is and when you will start receiving the maximum social security benefits. You can apply for Medicare benefits at the same time, or sign up for Medicare as early as three months before your 60th birthday.
Where to apply for benefits
You can apply for social security benefits in three ways. You can apply online at the Social Security website, you can apply over the phone, or travel to a local Social Security office. When you apply, you will need the following information:
- Your Social Security number
- Your birth certificate
- Your W-2 tax forms from the past year
- Your military discharge papers (if you were ever in the military)
- and Social Security numbers, if they’re applying for children’s benefits
- Proof of U.S. citizenship
- The name of your bank and your account number
All information must be the original or a certified copy. If you apply by phone or online you will need to mail in the documents, which the Social Security office will mail then mail back. If you apply in person, you can simply bring the forms to the office.
Planning for your family
If you want to care for your family after you retire (for example, if you have a child still at home or are caring for a grandchild full time), there are additional children’s benefits that you can apply for as well as the basic social security benefits. You will also want to make sure you are contributing the maximum funds possible to your 401k and other savings accounts.
Planning for retirement is a challenging process that is extremely important. The best way to start is to begin as soon as possible and try to abstain from applying for government benefits as long as possible. The less you draw from the government early, the larger your checks will be.