Nowadays, many of us are questioning when exactly is the right time to retire? For those that have lost their jobs due to the coronavirus pandemic, is now the best time? We cannot deny that what is still going on in the world has most likely affected our retirement plans, so it is imperative that you are taking charge and planning properly. In this article, we are going to go over three of the most important questions to ask yourself before retiring early. Keep reading!
- What do I do with my Social Security benefits?
This is a major part, if not one of the most important parts, of retirement. Social Security benefits have been gathering for the 35 highest-paid years of your working career, so you need to make sure you are aware of what the next steps are regarding your benefits. If you have not filed, you can file as early as age 62, however, if you wait until the full retirement age (70 years old), you will increase your benefits by 8% per year. You will want to refer to the Social Security Administration website in order to begin the process of filing for Social Security or resume where you left off. It is better to have a plan in mind than to wait until it is absolutely necessary.
- Do you need your retirement savings right now?
If the answer is yes, you will need to understand that while convenient, early Social Security withdrawals do have a penalty. However, as a result of the COVID-19 pandemic, the United States Government waived all fees regarding early withdrawals (under age 59 ½). While this option may be tempting, you will still have to taxes on your distributions related to the coronavirus pandemic, but you will have 3 years to do so. If you are in need of your retirement savings now, whether that be Social Security or your funds in your 401(k), it is best to consult with a financial professional to go over the best practices for withdrawing those funds.
- Have you reconsidered your entire retirement plan?
If you are unable to follow your current plan, you need to reconsider and reevaluate your options moving forward. The cost of retirement for you might have changed, and the savings you once had need to be either replenished or re-worked in a way that makes your future retirement affordable and manageable for yourself and your family. There are several resources that you can use to calculate how much you need to have saved for the retirement you want have.
Even after asking yourself these questions, if you are still unsure about your retirement, Heritage Wealth Management is here to guide you along the process. Reach out to us by phone or email, and let’s get you the retirement plan you deserve.