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Never too early to plan for retirement

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By Joan Martin

Are you ready to retire? Even if retirement is many years away, it still is a good idea to annually review your plans and see if you are making progress.
Talk to a retirement counselor at work if you are within 10 years from retirement. A one-hour conversation now may help you make financial decisions that will benefit you later.
If your company doesn’t have a retirement counselor, then you may want to consult a financial planner or talk to a representative from your retirement plan. Reviewing social security benefits annually is also a good idea. You should receive a statement annually from the Social Security Administration. It usually arrives near your birthday.
Being able to retire when you want is important. There is a recent trend to working longer, even if it’s part-time. Economically it may be better to continue working. Staying active and involved in satisfying work also helps with mental alertness and social connectivity.
Consider your retirement plans. Do you plan to travel? Are you planning on downsizing or moving? Identifying your retirement goals will help you determine how much money or income you will need to meet the retirement lifestyle that you want.
Make a list of all your retirement income sources. Include income from social security, 401(k) and 403bs, IRAs and other investments. You may have defined benefit plans from previous employers. Be sure to include those plans and keep your address updated with the former employer.
Make a list of your current expenses. Look at each expense and determine if you think it will go up or down in retirement. Finally, make a retirement spending plan based on your anticipated income and expenses.
Typically, retirees need 70 to 80 percent of their current income to cover their retirement expenses.
If you are thinking of early retirement and part-time employment, then remember that paid employment may affect your social benefits.
In 2013 if you were under full-retirement age, $1 was deducted from your benefits for every $2 you earned over $15,120. If you reach full retirement age in 2013, then you can earn $40,080 gross wages or net self-employment prior to the month you reach full retirement age and not lose any benefits in 2013. Social security will deduct $1 in benefits for every $3 earned above $40,080. The same earnings limits apply to a spouse or child who works and receives benefits on your record.
Remember that full retirement age may be 67 for you. The retirement age had been 65 for many years. Beginning with people born in 1938 or later, that age gradually increases until it reaches 67 for people born after 1959. Congress cited improvement in the health of older people and increase in average life expectancy as primary reasons for increasing the normal retirement age. A special note for anyone born on Jan. 1, you should refer to the previous year for your retirement age.
Plan for your retirement early. Always contribute to a retirement plan even when it isn’t mandatory. Never fail to put into an account when the company provides matching funds. There is never a safer investment than matching funds.

Joan Martin is a consumer and family sciences agent with the Anderson Extension office.