Thoughts for the Soon-to-Be-Retired

Sally-Meg-Carlos
I’m nowhere near retirement, but I’m always thinking about it, mostly because of my parents, who are reaching that age and are part of a large population of older Americans who don’t have enough saved to live out their golden years comfortably.

And I don’t see them being the types who can supplement what they do have socked away with informal, sharing economy income. My father severely injured his arm while working in the automotive industry; I don’t see him becoming an Uber driver or Amazon Flex delivery person any time soon.

I think about this kind of thing when I read something like Jane Hodges’s piece in the WSJ about what soon-to-retire people should be doing and thinking about now to avoid trouble. “Understand revocable versus irrevocable choices,” she writes, which means, essentially, that we need to remember that there are some choices that you can’t undo. Take Social Security: If you’re able to delay taking Social Security until you’re 70, you’ll maximize your benefits. If you decide to withdraw early, you’ll receive less money. There’s lots of money riding on this single choice. Here’s Jane Rose, a vice president at RTD Financial Advisors Inc. in a Journal article last year:

For those who can do it, the difference in benefits can be compelling. The average monthly benefit collected by 62-year-olds in 2012 came to less than $12,500 a year. One of my clients, by contrast, waited until she was 70. Even though her salary was rarely high enough to qualify for the maximum Social Security withholding, she now receives more than $35,000 a year in benefits.

My father’s already made the decision to withdraw Social Security benefits, but my mother hasn’t; I’m trying to discuss this kind of irrevocable choice with her and lay out the options and repercussions.

Another thing Hodges points out is that when you’re nearing retirement—and this will sound counterintuitive—you should start preemptively spending money on things like rooftop repairs or cars that are reaching their last miles. This is because when you’re on a fixed income in retirement, having to tap your account for these kinds of big ticket items suddenly can feel particularly painful.

I talk about these things with my folks, and they say, yes, let’s think about it, but without any real sense of urgency. We will find a way, they say, and they will, I do believe it. And then I file away these conversations in the back of my head, to think about in one, two, three decades from now for my own well-being.

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