Here's part two of a USA Today article on 10 things you should ask yourself about retirement:
Should I buy long-term care insurance?
A long stay in a nursing home is many retirees' worst nightmare. The expense can ruin nearly anyone's finances.
Your odds of winding up a long-term resident in a nursing home are long, probably longer than you think.
If you choose to get long-term care insurance as a safety net, your premiums will depend mainly on these factors:
- The waiting period before it starts to pay.
- How much it pays.
- How old you are. The older, the more expensive the policy.
Your insurance shouldn't cost more than 5% of your income. That's your retirement income, not your income now.
Do I want to work after I retire?
Do you need to? The answer to that question may give you an answer to the first question.
Choosing to work after you retire will affect your Social Security payments. Here's how:
- If you wait to retire until you are age 65½, you receive your full benefits no matter how much you might still be earning. The cutoff age for getting full benefits rises gradually; for people born after 1959, the age is 67.
- If you are younger than 65½ for all of the year you retire, the government cuts your benefits by $1 for each $2 you earn above $12,000. If you retire during the year you reach 65½, your benefits are cut by $1 for every $3 above $31,800.
- If you wait to claim Social Security until you are 70 or older, you will get higher benefits than you would at 65. There is no limit on how much you can earn.
My thoughts:
1. Did they answer the first question above? If so, I missed it.
2. I think most people should plan on working well past 65. Based on what I know about the finances of people in America, they'll need to just to make ends meet.
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