HISTORICALLY, most Americans have considered 65 to be their target retirement age. This is likely the result of past Social Security laws which allowed for a full benefit beginning at age 65.
Workers today, however, are retiring at earlier ages than in years past. In just the last few years, for example, the average age for retiring has dropped to age 63. And many younger workers are planning on retiring even earlier.
What you give up
This trend towards retiring earlier is not without its costs. Here are a few of the financial results of early retirement which must be considered carefully:
Not only are Social Security benefits reduced for early retirement, but the “full benefit” age is being gradually increased to age 67.
Retiring early often eliminates ones greatest earning years and the resulting savings that would have taken place in these years.
The annual benefit provided by employer sponsored defined benefit pension plans is usually based on a combination of years of service and your ending salary. Both are reduced by early retirement.
Health care costs tend to increase for retired individuals. Benefits that were once paid for by employer sponsored coverage often become the responsibility of the retiree.
Consider your options carefully
Choosing when to retire is one of the most important financial decisions you will make. Consider your options carefully. Careful planning can help ensure you a happy and financially independent retirement.
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Evangeline is a California registered tax preparer, a legal document assistant for the general public, and a freelance paralegal offering assistance to various attorneys. She can be reached at her office at 2451 Colorado Blvd. #2, Eagle Rock, CA 90041 or at her marketing location inside the Eagle Rock Plaza. Her phone number is (323) 550-1869 or you can check her website at: www.evangelinegiron.net. She is a member of the court-endorsed California Association of Legal Document Assistant (CALDA) and an Associate Member (Non-attorney) of the LA County Bar Association (LACBA).
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Note: Evangeline is not an attorney nor does she provide legal advice. She is a bonded and registered Legal Document Assistant and prepares legal documents per the specific direction of clients.
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