Retirement Saving Tips For 65-Year-Olds And Over

The age of 65 used to be the common number at which people retired, but times have changed and even the Social Security Administration (SSA) has decided to increase the age at which full retirement benefits are available. With the shift from defined-benefit plans to defined-contribution plans, many savings programs not producing projected returns. This means that many individuals may not only need to postpone the date at which they start to receive social security and other retirement benefits, but they may also have to live a retirement that is quite different from the one they envisioned. Even for those who are financially secure, reaching age 65 does not always mean time to retire, as many 65-year-olds love their jobs and want to continue working. (To learn more see, Stretch Your Savings By Working Into Your 70s, Introduction To Social Security, The Demise Of The Defined-Benefit Plan and the Social Security Benefit Calculator.)

Determine Your Readiness
If your employer's policy is to offer retirement at age 65, consider whether you are really ready to retire from a psychological and financial perspective. If not, consider whether you want to ask your employer to allow you to work a few more years, or if you prefer to be hired as a consultant. You want to do this at least a year before you reach age 65, as some employers start the retirement process early. Many employers are now focusing on hiring and retaining employees who are experienced and 'know the business' to strengthen their intellectual banks. (For more on assessing your financial readiness for retirement or to view other age brackets, see Savings Plans For Minors, Retirement Savings Tips For 18- To 24-Year-Olds, 25- To 34-Year-Olds, 35- To 44-Year-Olds, 45- To 54-Year-Olds or 54- To 55-Year-Olds.)

Staying on as a salaried employee not only means that you continue to receive a steady income, but also that if your employer has a health plan, you will continue to receive health coverage and other privileges offered by the employer. On the other hand, providing consulting services offers you more flexibility and could allow you to have more of a working-retirement, thereby enjoying both options at the same time.

Budget - Avoid the Zealous-Spendthrift Trap
Most retirees who have saved up for many years feel that reaching retirement age means it's time to enjoy the fruits of their labor. While that is a fair concept, many go overboard and spend it all in a few years on a lifestyle that is relatively lavish compared to their pre-retirement lifestyles. To make sure you do not fall into this category, it is wise to budget your expenses. While budgeting, be sure to include non-traditional expenses that you plan to incur. This will help you to make a realistic determination of whether you can afford to incur future expenses. If you are no longer working, a budget is even more important, as your income will likely come from your savings, social security and any pension balance you may have. (To read more on planning for your retirement years, see Life Planning - More Than Just Money, Time To Rethink Your Post-Work Needs and Determining Your Post-Work Income.)

Determine the Best Time to Take Social Security
Social security is usually included in an individual's financial projections for retirement. One key decision when factoring social security into your equation is to determine whether you will receive full or reduced benefits. If you were born before 1938, you are eligible to receive full retirement benefits from the SSA at age 65. If you were born in 1938 or afterward, your full retirement is determined by how long after 1937 you were born. Please see the following table for details.

Age To Receive Full Social Security Benefits
Year of birth	Full retirement age
1937 or earlier	65
1938	65 and 2 months
1939	65 and 4 months
1940	65 and 6 months
1941	65 and 8 months
1942	65 and 10 months
1943-1954	66
1955	66 and 2 months
1956	66 and 4 months
1957	66 and 6 months
1958	66 and 8 months
1959	66 and 10 months
1960 and later	67
NOTE: People who were born on January 1 of any year should refer to the previous year.
Source: www.socialsecurity.gov