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Social Security and Retirement Plan

Many people like to get a head start on planning their family’s economic future. And without a doubt, a major part of that process concerns retirement.

When planning your own retirement, it’s important to consider factors such as your current economic situation, your future needs, and if you will be depending on other sources of income.

Social Security is an essential part in planning your retirement from the work force, and so it’s recommended that you get to know some of its most important aspects.

1.  Retirement Age

In order to retire and be able to collect Social Security benefits, you must be at least 62 years-old. However, if you begin to collect at that age, the funds will be permanently reduced. If instead you decide to retire at age 67, you will be able to collect your full benefits.

See the Social Security department’s Retirement Planner for further information.

2. Number of Social Security Credits Needed to Retire

In addition to reaching retirement age, you should also have accumulated a total of 40 credits. You earn credits depending on the number of years you worked. Generally you get four credits for every year you’ve worked.

If you’ve already accumulated 40 credits and you’d like to know the amount of money that you’d collect during your retirement, you can create an online Social Security account and receive a copy of your benefits.

If you don’t have the required 40 credits but would like an estimate of the amount of benefits you’d receive, you can use the retirement benefits calculator.

3. Retirement Abroad

You have the right to collect Social Security benefits even if you live in another country. But if you are receiving retirement payments from another country that isn’t the United States, Social Security may reduce those benefits.

There are certain regulations for U.S. citizens and residents, and for those living in countries such as Cuba, North Korea and others. You can find more information about your payments while living outside the United States.

Use this tool to see if you can continue receiving your Social Security Payments abroad.

Applying for retirement benefits and other information

You can apply for retirement benefits online or at a Social Security office near you.

If you’d like to receive more information, get in touch with Social Security at 1-800-772-1213 or at 1-800-325-0778 (TTY, for people with hearing disabilities).

Read this note in Spanish.

What are all of the questions asked when you apply for SOCIAL SECURITY RETIREMENT ?

Asked by an anonymous Tumblr user.

The Social Security Administration lists all of the information and documents you need to apply for retirement benefits on their website.

You can apply for retirement benefits or Medicare online or by calling 1-800-772-1213 (TTY 1-800-325-0778). You can also visit your local Social Security office. Call ahead to make an appointment.

If you do not live in the U.S. or one of its territories, you can also contact your nearest U.S. Social Security office, U.S. Embassy or consulate.

How to Estimate Your Social Security Benefits

Whether you’re getting close to retirement or planning for the future, you can estimate your Social Security benefits.

The estimator gives you an idea of what your monthly Social Security benefits would be, based on your current record of Social Security earnings. Your actual benefit amount cannot be determined until you apply for benefits. 

As you plan for your retirement, keep in mind that you’ll need 70-90 percent of your pre-retirement earnings to maintain your standard of living when you stop working. Social Security benefits will only make up a part of this percentage and should be supplemented by a pension, savings, and/or investments. Check out 10 Ways to Prepare for Retirement.

Now is the Time to Plan for Retirement

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Day in and day out, we go to work, pay the bills, take care of the kids, and manage all of the other demands of daily living. Considering all these responsibilities and that the average American works 91,520 hours in their lifetime, it’s understandable that a comfortable retirement remains the American dream.

With emerging challenges and obstacles making a secure retirement seem more difficult to attain, it’s more important than ever to take the time to think about long-term financial needs so that our retirement dreams can become a reality.

Understandably, the process may seem complex and time consuming. Fortunately help is here.

National Retirement Planning Week, a nationwide effort to remind Americans of the necessity to consider their financial needs in retirement, takes place this week. Let National Retirement Planning Week be the motivation you need to set aside the time, roll up your sleeves and create a comprehensive retirement plan.

Why plan?

Let’s consider the facts. The retirement boom is underway. Approximately 79 million Baby Boomers will reach retirement age by 2030, with approximately 10,000 Boomers turning 65 every single day. For many, the challenges during retirement will be more complex than those facing prior generations.

During the last two decades many employers stopped providing traditional pensions. According to the Bureau of Labor Statistics, only 19 percent of workers in 2012 had access to a defined benefit. Instead, most employers now offer defined contribution plans, such as 401(k) plans. In the process of shifting to these plans, greater risk has been transferred to individual workers.

At the same time, we have seen vast growth in the cost of health care. In fact, the latest research from the Insured Retirement Institute shows that a healthy 65-year-old female will spend on average at least $417,000 on cumulative health care expenses including premiums during her retirement years.

Her male counterpart will pay in excess of $369,000. Life spans also continue to increase, and so future retirees will need to have additional retirement assets to pay for basic expenses—for a longer period of time—in retirement.

The Unknowns

And then there are the unknowns. One potent unknown is the future rate of inflation. A period of high inflation has the potential to increase the cost of expenses in retirement and erode the purchasing power of savings.

And there’s investment risk. Without access to a fortuneteller’s crystal ball, it’s virtually impossible to predict the performance of financial markets.

Creating a Retirement Plan

Intimidated yet? The challenges may seem vast, but they can be manageable so long as you are prepared. A solid retirement plan will help protect against foreseeable risks and hedge against the unknown variables.

If you are having trouble getting started, assistance from a financial professional is only a phone call away. There also are a number of resources available on the Internet to help as you think about your retirement needs.

The National Retirement Planning Coalition, organizer of National Retirement Planning Week, maintains an educational website— www.retireonyourterms.org— offering resources to help Americans stay focused on long-term financial goals.

One last thought—new research shows that Americans who have the highest levels of confidence in attaining a financially secure retirement are working with a financial advisor and have developed a targeted savings goal. So don’t delay and start planning today.

Use the resources available, set a goal, make a plan, save, and seek help from financial professionals when you need it. Now is the time to think about your retirement needs.

Use National Retirement Planning Week as the nudge needed to make the commitment to set aside time from your hectic day-to-day routine and put together a plan for a financially secure retirement. With a solid plan in place, your secure retirement dream could be on the horizon.

A free iPhone app called TSP Funds is currently being offered through the Apple store. It asks Thrift Savings Plan (TSP) participants for their account log in information.

This is not an official TSP app and the TSP does not recommend using this app to access your TSP account. Providing your information could result in a security risk to your account.

If you would like to access your TSP account, please log in directly at TSP.gov.