Millions of people will turn 65 this year and here's what you need to know if you're one of them.

This year, we will experience record-breaking levels of Americans entering retirement. In fact, nearly 11,000 people per day are expected to turn 65 this year, and if you do the math, this will total over 4 million by the end of 2024. Furthermore, this trend is not expected to slow down any time soon. The same projection remains true for the next 3 years. Experts have begun calling this wave of retirement the “silver tsunami”, or “peak 65”. So, if you yourself will be celebrating a 65^th birthday in the next few years, there are a few things you may want to consider.

Should I retire?

If you are still working, a question you may be eagerly asking yourself is, “When should I retire?” The answer is going to be different for every individual and depends on several factors. Will you receive a pension when you retire and, if so, will it continue to grow if you work a few more years? Do you feel prepared financially to retire so that you don’t outlive your nest egg? What will you do with all of the free time if you quit working?

Ways to fill your free time in retirement may be the more fun ideas to entertain; think grandchildren, travel, and hobbies. But, if you truly love what you do for work and are healthy enough to keep working, there is nothing that says you must retire at 65. In fact, a study by Pew Research Center found that 1 in 5 people over 65 actually choose to continue working. If you are ready to take a step back from the 9-5 grind you’ve been on for so many years, but don’t like the thought of fully stepping away from the working world, there are also other options like part time jobs and volunteering.

Financial Plan

Before you decide to leave the workforce altogether, however, you’ll want to make sure you have a solid plan for how you’re going to pay for retirement and ensure you don’t outlive your nest egg.

Many people have 401k’s with an employer that they’ve been contributing to for at least some portion of their working years. Sometimes the 401k is from an employer that they have since moved on from, and in that case, we like to call those “stray 401k’s”. Others may have IRAs, or ROTH IRAs, which are individual plans that are separate from an employer.

So the question is, what do you do with your 401k or IRA in preparation for retirement? First of all, if you have a stray 401k, it is a good idea to take back control of it. This is something that our team at Summerlin Benefits Consulting can help you with.

Furthermore, as you age and get closer to retirement, many experts will tell you to reduce the amount of risk you have in your financial portfolio. In fact, there is a general guideline, called “The Rule of 100” that recommends subtracting your age from 100 to get a reasonable level of risk to maintain in your portfolio; the rest should be kept safe in low or no-risk vehicles. When your money is in a 401k or IRA, it is entirely at risk and is at the mercy of a volatile stock market. There are other options, such as Fixed Index Annuities (FIAs) that you can move your money into, which will keep it safe from market declines while it still continues to grow over time.   

FIA’s are sold by insurance companies and involve an upfront payment by the owner. If moving the funds from a 401k or IRA, the upfront payment would occur by means of rollover or transfer, respectively. The annuity grows at a reasonable rate of return based on a specific market index, but is protected by the insurance company during times of down-markets so that you never lose money. FIA’s can also offer tax-deferred savings and monthly income for life so that you never have to worry about outliving your money.

If you would like to learn more about FIA’s and keeping your money safe from risk, a good step forward would be to reach out to Summerlin Benefits Consulting.

Don’t procrastinate!

Even if retirement may seem light years away, it’s truly never too early to start planning. The financial strategy of a younger person in their 40’s may look different than someone in their 60’s, but the point is that everyone should have a plan. Someone who starts contributing to a retirement plan early in life will have the opportunity to earn compounding interest and will also have time to recover during times of market volatility. Someone who is closer to retirement however, may make financial decisions focusing on growth accompanied by safety and stability. As you get older, there are also other concepts to consider, such as leaving behind legacy funds for your children or grandchildren, for example.

Of course, getting a handle on your retirement plan can be stressful. That’s why many people choose to put it on the back burner for a time when they think they’ll have less debt, student loans, mortgage payments, etc. But, there is no time like the present to solidify your plan so that you feel confident going into retirement, whenever that may be.  At Summerlin Benefits Consulting, we believe in keeping things simple and helping you relieve some of the stress.

Medicare Eligibility

In addition to being the general age at which many people choose to retire, age 65 typically gets a lot of recognition because it is the year you become eligible for Medicare benefits. Most people will enroll in Medicare at this time, unless they are still receiving health insurance from an employer; in which case they may want to reach out to a Medicare expert to determine whether they should still enroll.

Medicare benefits can be broken down into Part A, which covers in-patient hospital stays, rehabilitation at skilled nursing facilities, and home health care, and Part B, which covers outpatient services and doctor appointments. You can also enroll for “supplements” to enrich your benefits further, if needed. 

Riding the wave

Turning 65 may sound overwhelming, but it doesn’t have to be. Our main goal at Summerlin Benefits Consulting is to support our clients on their path in or towards retirement while offering retirement income protection guidance in a simple and easy-to-understand method. We fondly refer to our team of professionals as “Safe Money Experts”! Reach out today if you’d like to get started with a no-obligation financial review.