9 Key Ages for Retirement Money Decisions
Posted: February 24, 2012 at 7:08 am
The idea of retiring at 65 seems almost quaint these days. Even before the recession, rising numbers of people were working past their 65th birthdays, and this trend has accelerated during these past few years. For many, retirement is a forever-retreating goal. For others, moving to part-time work as part of an incremental retirement strategy makes sense.
[See 10 Steps to Fine-Tune Your Retirement Plan.]
Whatever your retirement prospects look like, there are many dates besides the day you stop working that can influence your decision. Here are different age milestones that might affect your retirement decisions.
59½. This is the earliest age at which withdrawals from tax-deferred retirement accounts--401(k)s, 403(b)s, IRAs, and the like--may begin without incurring an early withdrawal penalty.
62. This is the earliest age at which you may begin collecting Social Security benefits. However, the amount of benefits you get will be only 75 percent of what they would be if you waited until you reached your full retirement age (66 or 67 for people born after 1943).
65. You are eligible for Medicare benefits when you turn 65. If you are still covered by employer health insurance (either directly or through your spouse's health plan), you do not need to sign up for Medicare right away. Otherwise, you have a seven-month window (three months before your 65th birthday up until four months after your birthday) to sign up. This is an important deadline: If you miss it, you may wind up paying higher Medicare premiums for the rest of your life.
[See How to Size Up Your Retirement Nest Egg.]
66. If you were born between 1943 and 1954, your full retirement age (FRA) for Social Security benefits begins with your 66th birthday. The FRA is an important date. It is the date at which you are entitled to 100 percent of your Social Security retirement benefit. Because you can begin benefits as early as age 62 or defer them as late as age 70, your FRA controls the percentage of your full benefits that you would receive at these other ages. It also affects the tax treatment of any outside income you earn. And it is used to determine when your spouse can collect benefits based on your covered Social Security earnings.
67. If you were born in 1960 or later, this is your FRA.
70. This is the latest age through which your Social Security benefits will increase for each year you defer beginning to collect benefits. If your full retirement age is 66, for example, your benefits will rise by about 8 percent a year each year until you turn 70. They will not increase after that date, so there is no benefit to deferring benefits past your 70th birthday. In addition to collecting 132 percent of your FRA benefit if you wait until age 70, you would also collect any annual cost-of-living adjustments. So your "profit" for waiting each year is a return of 8 percent plus the rate of inflation.
[See Retirement Plans That Weather Economic Storms.]
70½. If you are retired, you must begin taking money from your tax-deferred retirement accounts when you reach this age. The smallest amount of money you can withdraw without incurring a tax penalty is called your RMD, or required minimum distribution.
The size of your RMD is calculated by the government based on life-expectancy tables. Legislation is regularly introduced, including in the Obama Administration's proposed 2013 budget, to relax RMD rules. The goal of the proposals is to give retirees more control over the timing of their account withdrawals.
85. This is a standard date at which payments begin for what are called longevity annuities. These are deferred annuities purchased 20 or even 30 years earlier. They are designed primarily for people who are worried about running out of money before they die. Because many people will have died before turning 85, insurance companies are able to provide attractive rates for these products. And because retirees know how much money they would begin receiving should they survive to age 85, they can spend down their other assets by that date, should they choose, without fear of later running out of money.
Your Age at Retirement. This is, of course, the most important of all the ages listed here. Good luck!
Twitter: @PhilMoeller
Go here to read the rest:
9 Key Ages for Retirement Money Decisions
Will Low Retirement Ages Last Forever?
Posted: at 7:08 am
Given the recent economic crisis in places like Greece and Italy, it's difficult to believe that the retirement age of workers in these countries is low. Turkey, for example, used to have a retirement age of 60 until the government abolished it and changed it to 25 years of contributions, meaning that depending on the age they entered the workforce, men and women would be eligible to retire based on the years they contributed to their retirement plan. The Organization for Economic Co-operation and Development (OECD) calculated that workers who made contributions for 25 years and started working at age 20 would be able to retire at 45. Greece closely follows Turkey in retirement age. In Greece the retirement age is 57 up from 55 in 1959. In Italy the age is 59, but will increase to 65 by 2030.
Turkey
Despite having low retirement ages, these countries have not been able to handle the economic strain the increasingly older population is placing on their government pension plans. This is demonstrated by their increasing retirement ages. Turkey has been struggling for years to keep up with its pension plan payouts. In 2008, the government was confronting a system that ate up 17% of its budget. Payments for the 12 years leading up to 2006 totaled 119% of that year's gross domestic product. Its early retirement age was threatening to bankrupt the country unless lawmakers decided to make a change. Social security was consuming almost 4% of gross national product. According to the OECD, this figure is forecasts to increase to 6% by 2045 if there are no changes.
In 2010, The United States Social Security Administration stated in their "Social Security Programs Throughout The World" report that as of 2036, Turkey's retirement age will rise gradually to age 65 by 2046 (men) and 2048 (women). This would allow pensions to accumulate more slowly.
National Retirement Age
Few countries now have a national retirement age of 60, including Belgium, Hungary, Korea and Luxembourg. France's current retirement age is 60.5. Given the increased life expectancy rates, many workers will have to wait longer to reach retirement. According to the OECD, to accommodate the growing old population, many countries are increasing their pensionable age.
The U.S. currently has the third highest retirement age: 66 and will increase to 67 by 2022. Iceland and Norway have the oldest 2010 retirement age of 67. Denmark will be gradually rising its retirement age to 67 by 2028. In the U.S., workers can start receiving social security retirement benefits at the age of 62 but at a lesser amount. However, the United Kingdom is currently projected to overtake all other countries by 2047 with a retirement age of 68. According to the OECD, the pensionable age will reach 65 for both sexes by 2020.
The Bottom Line
Due to the economic strain life expectancy rates are placing on countries, governments around the world are encouraging people to work longer. Some countries are even placing strict qualifying conditions on workers who want early retirement. Early retirement seekers get fewer pensions while a larger payout is given to workers who stay in the workforce longer. Some countries are even taking the retirement age limit further.
More From Investopedia
Read more from the original source:
Will Low Retirement Ages Last Forever?
Advanced SystemCare 5.1 Pro Serial Key – Video
Posted: at 7:08 am
Houston Tanning | Luxury Tan Spa ~ Phone: 713-662-9200 ~ Glo Sun Spa – Video
Posted: at 7:08 am
Follow this link:
Houston Tanning | Luxury Tan Spa ~ Phone: 713-662-9200 ~ Glo Sun Spa - Video
Whitney Houston (1963-2012) – Super Bowl XXV (1991) – The National Anthem of the United States – Video
Posted: at 7:07 am
Continue reading here:
Whitney Houston (1963-2012) - Super Bowl XXV (1991) - The National Anthem of the United States - Video
Advanced System Care 5.1.0 Serial Key (Full Version) 100% Work – Video
Posted: at 7:07 am
Continued here:
Advanced System Care 5.1.0 Serial Key (Full Version) 100% Work - Video
PC Specs and Setup (www.PerformancePC.net) – Video
Posted: at 7:07 am
Continued here:
PC Specs and Setup (www.PerformancePC.net) - Video
Ryan Star 2-22-12 After show private performance for drawing winners, Culture Room Ft.Lauderdale – Video
Posted: at 7:07 am
Continued here:
Ryan Star 2-22-12 After show private performance for drawing winners, Culture Room Ft.Lauderdale - Video
Personal War HQ – Video
Posted: at 7:07 am
Original post:
Personal War HQ - Video
CK Performance Profile – Video
Posted: at 7:07 am
See the rest here:
CK Performance Profile - Video