Here’s a threat to a fulfilling retirement that seems to hurt as many people as almost anything else I see: Overspending risk. When you transition into retirement and receive a lump-sum pension payout from your employer, or cash out your 401(k), you may suddenly be in possession of hundreds of thousands, if not millions of dollars, which is likely more money than you’ve ever had in your life.
Sometimes I’ll speak with somebody who has had the same financial advisor for many years and has not liked him or her because that advisor is condescending, or they provide poor service, or the results have been lousy. Whatever the case may be, you’re certainly not stuck with that financial advisor.
Over the years, you’ve probably noticed headlines warning about the substantial changes that experts believe are coming to Social Security. While these headlines are intended to scare you, the one thing that you could always count on was that whatever changes were being promised were only going to happen “at some point in the future.”
Welcome to the future.
What Just Happened?
Social Security remains a hot-button topic for many people. One of the main reasons is that each and every day more and more Baby Boomers are taking down their shingles and heading into retirement.
According to the Social Security administration, even though more women than at any time in America’s history are in the workforce, on average, they still receive a greater proportion of their Social Security benefits from their husband’s (or their former husband’s) accumulation of benefits than from their own work history (this will change as the women who have been in the workforce for their entire careers begin to retire).
The age in which you begin to take Social Security affects how much you’ll receive over the duration of your retirement. Here’s a basic guide:
It’s pretty common to hear financial experts advise people to put off taking Social Security for as long as possible to maximize their monthly payments. While in many cases that might be the best course of action, it’s definitely not the best for everyone.