As part of long term care planning prior to retirement, consider Social Security and other retirement benefits. It is important to know what your income, or maybe both you and your spouse’s incomes, will be as you get older. What will you need to live on? What will you need to pay for long term care? Do you have retirement accounts, such as IRAs, 401ks, or 403bs? When should you start taking Social Security or these other retirement benefits?
When discussing Social Security and retirement benefits, as part of long term care planning, consider when you will take these monies. You could retire early at 62 and start taking Social Security. However, your benefits will be much less than they would be if you had waited to reach full retirement at 66. If you were working and deferred taking Social Security until you reached age 70, you would receive even more each month. For every year that you defer taking your Social Security retirement benefits past age 62, you get an increase of approximately 7% to 8%, which could add up to a total increase of 176% if you waited until age 70. There is no reason to defer taking Social Security past age 70, even if you are still working.
On the other hand, with retirement benefits such as traditional IRAs, 401ks and 403bs, you may not have to take monies from these accounts until you reach age 70 1/2. If you want to take these monies prior to reaching 59 1/2, there may be penalties. You can start taking these retirement funds between those ages, if you need funds to live on while continuing to defer taking Social Security until age 70.
Going through a discussion about these retirement benefits and when to start taking Social Security as part of long term care planning, as well as all of the other reasons to do such planning, can help you maximize your income and improve your later years.