By 2030, all Baby Boomers will be 65 or older. So throughout this decade, many of you will be reaching an important milestone. As your 65 birthday approaches, make sure you address these four steps for better retirement preparedness.
Make a plan for Social Security. If you were born in 1955 or later, Social Security defines your full retirement age as 66 or 67 (depending upon your exact birth date). So, the old assumption that you can retire at 65 is not entirely true. You can claim benefits early, but they will be permanently reduced.
Or, you can wait until your full retirement age and claim your full scheduled benefits. Those who wait until age 70 will enjoy monthly payments that are about 30 percent higher than they would have been, if they had claimed them at 66.
For most people it does seem best to wait until at least full retirement age to claim benefits. But since each situation is different, the main point is to estimate Social Security benefits as you approach age 65 and then make a plan based upon those figures.
Enroll in Medicare. You become eligible for Medicare when you turn 65, but you can begin the enrollment process as early as three months prior to your birthday. Those who have already claimed their Social Security benefits are automatically enrolled in Parts A and B, so they don’t need to do anything.
Otherwise, you will need to enroll at age 65, and decide whether you want Parts A and B or to enroll in a Medicare Advantage (Part C) plan instead. You might also wish to elect a Medigap plan or Part D (prescription) plan. Talk to an insurance professional about your options.
Consider long-term care insurance. About half of people turning 65 today will eventually need long-term nursing care. With the average cost hovering at $140,000, you might someday feel glad you purchased long-term care insurance. Consider it now, because premiums jump about 8 to 10 percent after you turn 65.
Look for property tax breaks. Some states and municipalities offer a property tax break for those over 65, but you usually have to file for it.
Meet with your financial advisor. It’s a good idea to meet with your financial advisor regularly, but especially as you approach retirement. Give us a call to schedule an appointment, and we can help you estimate Social Security benefits, make decisions about your budget, and answer any other questions you might have at this time.