You can retire at 62 and can consider it as early retirement, but it come with a penalty. You can also retire in the years between the earliest retirement dates and full retirement and get a bit more money with each passing year. Suppose you create a financial plan based upon the three-legged financial stool of personal savings, part-time income (by having retirement part time jobs), and getting Social Security Income (Social Security benefits). As your planned-for retirement date approaches, (more…)

In just a few years, the first of an estimated 77 million Baby Boomers will become eligible for benefits and will have to make that decision. A full 32 percent of the workforce has no retirement savings set aside and 80 percent have no private pension. About two thirds of retirees receive 50 percent of their income from Social Security. Today about 20 percent of Social Security recipients rely on their checks as their sole source of income. Taking the Social Security check early at age 62 versus age 65 currently costs recipients 24 percent of their monthly social security benefits and that penalty is going up to 30 percent. Unexpected taxes and additional penalties can literally take away the rest. (more…)

Once the cash flows to be financed are determined, whether via a detailed version of the determination of planned expenditures or the simpler “rule of thumb approach,” the question of how each $1 of assets will be turned into an income flow must be addressed. How much income will each dollar generate, and for how long? This is the basic issue of longevity risk (the risk that a person will live either beyond, or not until, their “life expectancy”). This source of uncertainty presents perhaps the most significant challenge for cash flow planning in retirement. (more…)

The economic status of older adults in the United States today is greatly improved, and there is much diversity of circumstances among different elder populations. In 2004 inflation-adjusted dollars, the median income of elderly households had increased from $13,228 in 1960 to $24,509 in 2004. Since the mid-1950s, poverty, as measured in 2005 by the U.S. Census Bureau’s poverty thresholds, has decreased for all age groups but most noticeably for adults age 65 years and older. (more…)

Analyses of retirement income adequacy and retirement income planning often focus on people age 65 and over because the overwhelming majority of workers have retired by this age. Thus it is possible to look at the sources and level of income available to people over 65 to get some sense of the standards of living that are achievable in retirement.

An elderly unit is a family in which at least one person is 65 years of age or older. 44 percent of the elderly units were receiving some pension income. (more…)

Some early retirement survey focused almost exclusively on men when making retirement decision. Until recently, woman may have some decisiveness which affected retirement decision for her and her husband. Recognition of the difference point of view add some complexity on making retirement decision. Off course, the retirement decision is varied beyond gender and economic issues. Substantial differences in health condition, employment market, family finance situation, and care giving responsibility can lead to the differences timing of retirement. (more…)