Don’t freak out about turning 65, just prepare
April 8, 2018
By: Mark Harvey
Email: harvemb@dshs.wa.gov
As I have pointed out before, on probably too many occasions, we just aren’t dying on schedule, anymore; and to make things worse, we’ve been so busy conducting our lives (you know, working, raising kids, taking care of people who needed to be taken care of, attempting to ignore the news, etc.) that many of us just sort of “missed” a bunch of birthdays.
Well, we didn’t really “miss” our birthdays per se, we just didn’t have the time or energy to add them up and realize that we were getting “older.” Well, OK, we knew we were getting older, but we just didn’t entirely grasp the fact that “getting older” might actually mean something; THEN (often around age 64), something, someone or Paul McCartney singing, “When I’m 64,” actually penetrates our consciousness and we suddenly realize: HOLY ***! I’m about to be 65!
(Nothing gets by us…)
…and we FREAK: “There’s all this stuff I’ve GOT TO DO when I turn 65 and I don’t know anything about any of it!”
What we need is a “64 Checklist” – All the things I have to do on the day I turn 65!
Well, friends and neighbors, Harvey to the rescue once again, because I’m about to provide exactly that – Ready? OK, here are all the things that YOU HAVE TO DO when you turn 65: _______.
Right: Nothing.
Now, there are things that it might be smart to do, but as we’ve all learned (and, probably, the hard way) “smart” and “HAVE TO” are NOT the same thing, but let’s begin at the beginning.
There is no law that says we have to retire when we turn 65; now, if your particular line of work is something like a first-responder or an airline pilot or something like that, your profession may have its own rules about retirement, but in general: No. We are NOT required to retire.
“What about Social Security???” What about it?
“Don’t I have to start collecting Social Security when I turn 65?!” No. Let’s go there.
Most of the people that most of us grew up with achieved their “full retirement age” at age 65. “Full retirement age” means the age at which you can collect 100% of the Social Security benefit that you’ve been earning all these years. (NOTE: I’m not going to attempt to address every possible nuance or scenario that could ever happen to anyone – I’m just going to focus on what happens to most of us, most of the time)
Now, way back in 1983, Congress began to realize that we weren’t dying on schedule, so it passed a law extending the “full retirement age” based on the year you were born, so those of us born in 1943 to 1954 have a full retirement age of 66, and it goes up a couple of months per year after that (e.g. birth year = 1957, full retirement age = 66 and 6 months). Folks born in 1960 or later, have a full retirement age of 67.
For the skeptics among us, go to www.socialsecurity.gov/planners/retire/ageincrease.html and see for yourselves.
So, if you were born in 1957, you can get 100% of your Social Security benefit when you hit age 66 + 6 months – Yay! Could you get it earlier? Well, yes: You could start collecting at age 62, but your monthly benefit will be permanently reduced by about 30% – At age 64, it’ll be reduced by about 20%, and on it goes. There could be any number of reasons why that might be a good idea for you, in spite of the reduction, but you need to understand it.
The other side of the “full retirement age” coin is that if you delay collecting Social Security beyond your full retirement age, it goes up – To the tune of about 8% per year! – For up to four years; so, for many of us who have a full retirement age of 66, if we delay it until we’re 70, we’ll be able to collect about 133% of our Social Security benefit (graduated for any of the years in-between)!
That may, or may not, be a good or attractive idea for you – It just depends upon you and your circumstances and your life and and and…But it is a good idea to understand how the game is played and where you’re at.
Have no idea where you’re at? Well, you could establish a free “my Social Security account” by going to www.socialsecurity.gov/myaccount and setting one up, which I happen to think is a GOOD idea for all of us! Also, once you do that, you can get a “Social Security Statement” that will tell you exactly how much you can collect, under every possible category and when, anytime you want it.
So, let’s review: Generally speaking, there is nothing that requires you to retire at age 65, nor is there anything that requires you to start collecting Social Security at age 65, so there is no crisis.
“So, I could just forget about it all, for a while?”
I was afraid you’d ask that; well, yes, I suppose so, but someday you’re going to care. And if all this stuff is news to you on the day you start caring, you might discover that, because you never knew where you were at, you now have NO IDEA where you’re at – And don’t like it!
My main message for today is: Don’t FREAK!
Here’s another message: Don’t _____ AROUND!
The best place to be is the space in-between.