Perhaps you set a few retirement goals years ago when you first began your career, but at that time retirement planning seemed like a distant future. Now, however, that future is becoming more and more of a reality. Have you revisited those retirement goals that you established so long ago? Over the years, your lifestyle, income, public policy, the economy, and other factors have changed. Your needs and desires are likely to be very different today, and they might continue to change before you finally retire.
Recently we have seen changes in the following areas. Stay updated on news that will affect your retirement, and continue to adjust your plans as needed.
Changes to Social Security regulations.
For years, couples took advantage of the “file and suspend” strategy, which allowed one spouse to claim spousal benefits while the other (higher-earning) spouse continued to grow their own benefits. But under the new budget passed by Congress this past fall, the “file and suspend” strategy has been axed. If you were counting on this filing strategy, you and your spouse will have to devise a new plan for claiming your Social Security benefits.
Social Security benefits are changing, too.
Social Security will likely comprise a significant part of your retirement income one day, but you won’t know the exact amount of your benefits until you retire. This year, the average benefit is down 24 dollars compared to last year.
Cost of living adjustments are not guaranteed.
During most years, seniors look forward to their cost of living adjustment (COLA) from Social Security. This small upward adjustment in benefits checks allows
Health care is changing.
Most of us noticed higher health insurance premiums last year, and that trend is expected to continue. Out-of-pocket expenses are rising, too. As you get older, you’re more likely to experience serious illnesses and high medical bills, so keep an eye on the cost of health care. You will likely need to adjust your expected retirement budget in order to account for this expense.
Your ability to save for retirement might change, too.
The government recognizes that saving for retirement is a challenge for many workers. That’s why they provide us with tax-advantaged strategies to save, such as the 401(k) and the Saver’s Credit. Check to be sure that you’re contributing the maximum to your 401(k) each year (it sometimes changes from one year to the next). Also, check to see if you’re eligible for the Saver’s Credit on your federal tax return. The threshold can change from year to year; this year it was increased to $30,750 for singles and $61,500 for couples.
Since these changes can affect your retirement plans, we do our best to keep you updated. Call our office to schedule an appointment, and we can help you make necessary adjustments to your retirement plan.