Ask the Expert
Your Money
Thoughts And Ideas On
Retirement & Investing
Should I draw social security early at
age 62 or wait?
Greg Smith is a local
investment advisor
and has over 20
years experience in
the investment field.
He is a graduate of
Appalachian State
University with a
degree in business.
535 S Cox Street
Asheboro, NC
(336) 672-2155
18
Naturally every situation is different,
but as a general rule experts say if you
can wait until age 70 you will maximize
your benefits. If you draw social security
early at age 62 you will only get 75% of
your benefit. If you defer until after your
retirement age the amount grows by
8.00% annually.
How do IRA “Required Minimum
Distributions” work?
This is one of the most confusing concepts
for my clients. The simplest way to explain
RMD’s is this: The government wants you
to take money out of your retirement
accounts each year and pay income tax on
it!
When you reach age 70 you will need to
withdraw approximately 3.65% from each
of your IRA accounts and pay income
tax on it. One of the biggest mistakes
retirees make is they have IRA money
sitting in accounts earning almost nothing
Asheboro Magazine, Issue 51
….But they need to take out 3.65% to
satisfy their RMD. That means you are
withdrawing a lot of your principal.
Life Insurance and Final Expense
Planning
Another important issue to keep in mind
is death prior to retirement. An early
death or critical illness could change a
family retirement plan. Make sure you
have adequate life insurance to pay off
mortgages, business loans and also enough
money to finish funding your retirement
investments….Should an early death occur.
If you owe $100,000 on your mortgage
and you have $125,000 in your 401K….
buying a $500,000 Life insurance policy
would give you enough money to pay
off the mortgage and put the rest into
investments so your spouse will have
adequate retirement income. Some life
insurance policies will pay you part of
the death benefit in cash if you develop
a critical illness such as cancer, heart
attack, stroke, etc. This money can help
if you miss a year of work or become to
disabled to work.