When is the earliest time to retire and get the most out of company pension and social security.?
I believe I have enough saving in my 401K now to grow to more than one million when I turn 65. I am at 50 and thinking when I can retire without losing much in company pension and social security. My guess would be 58 or 59 that I would have the best three years of my income within the last ten years of my retirement for the social security calculation. I do plan to do part time work though to keep me busy with much less stress. I should be free from any liability or debt because my kids should finish college and my house has been pay off this year.
Public Comments
- Only you can decide when to apply for your Social Security. Many people have the misconception that if you file at age 62, you'll never receive anything based on your work and earnings. This is not always so. For 2007, you can earn up to $12960 if you're under age 62. Any excess earnings over that amount would be held up front to help prevent an overpayment. Once enough of the benefits are withheld, you could receive a payment. Since you plan on working part time, this might be the best option. Then there's the old saying "I'm going to wait so I can get my full check. They're not going to cheat me". Waiting until later can increase your benefit amount. Sometimes the increase is small, sometimes it's large. This all depends on your annual salary. When you're ready to file for your benefits, you can visit a local office and speak with a claims representative. They will help you work out which option is best. They will show you an estimate of how much you could receive from age 62 up to your full retirement age. For example: Let's say you expect to receive $1000 a month when you file at age 62. And for the ease of the calculations, let's say your full retirement age is 65. From 62 to 65 is 3 years. Multiply $1000 a month by 36 to get $36000.00 total. Now let's say you wait until age 65 to file and your benefit increases to $1150. Take the difference between benefit amounts, $150, and divide that into the original figure of $36000.00. You'll see will take exactly 240 months, or 20 years for you to recoup that original $36000.00 or, break even. That's a long long time to get that amount. In this case filing at age 62 would be best. We can accept your application for benefits as early as 3 months before you turn 62. If you were in the active military, we might be able to use your military service to help increase your payments. Sounds like you've already got a good plan in place. Naturally, as you continue to work, you'll receive credit for any additional earnings and the estimates shown on your annual benefit estimate will increase. For more information, see www.socialsecurity.gov or call 1-800-772-1213. Social Security employee 18+ years
- Every year or so, check what income you can expect from your 401K and the state pension. When you think that is enough to live on reasonably well, say "good-by boss, be seeing you in Las Vegas"
