Some Support • Late Career/Retirement • Goal 3:
Plan for the Transition to Retirement Benefits
Action step 1.
Learn about Social Security.
Most people consider “retirement” to start when they begin to collect Social Security retirement benefits. Social Security is a monthly payment that replaces part of the income you earned by working. To qualify, you must have worked full time for at least 10 years.
The amount you earn through Social Security varies depending on your lifetime earnings and when you choose to start benefits. The higher your taxed earnings, the higher your monthly payments will be. Similarly, if you delay retirement, your monthly benefits will be increased.
If you retire early, you may begin collecting Social Security benefits at age 62. However, these payments will be less than if you waited to claim your benefits at full retirement age. Full retirement is age 65 for workers born in 1937 or earlier and rises gradually to 67 for those born in 1960 and later.
Resources
Words to know
Action step 2.
Learn about Medicare.
Medicare is a health insurance program for people age 65 or older. Certain people younger than age 65 can qualify for Medicare as well, including those with disabilities.
As you approach 65, you will need to learn about Medicare health insurance options and make some important decisions. There are several different Medicare options that vary in cost and coverage. While the program helps with the cost of healthcare, it does not cover all medical expenses or the cost of most long-term care, so you may need to buy supplemental insurance.
Many people seek help when making these decisions. In addition to information available online, look for programs at local libraries and community centers. You can also talk to a health insurance broker.
Resources
Words to know
Action step 3.
Develop a timeline for retirement.
The age at which you retire affects your benefits. Full retirement is age 65 for workers born in 1937 or earlier and rises gradually to 67 for those born in 1960 and later.
You can collect full Social Security benefits at full retirement age. If you choose early retirement, you will receive less money each month. If you choose delayed retirement, you will receive more money each month.
Your retirement age also affects how much income you can earn from part-time work. Planning ahead is key, because you have to apply for benefits several months before you plan to start receiving them.
