# February, 13, 2020

Most experts say you should begin saving for retirement in your twenties. And you should begin planning for retirement around 10 years before you actually retire. The average American, of course, does neither. But it’s never too late. This post looks at five things you should do when you’re planning to retire.

1. Create a my Social Security Account

You don’t have to collect Social Security benefits to set up a my Social Security account online. It’s quick, simple, and secure. Just enter your basic information – name, address, date of birth, Social Security number – and answer a few security questions designed to confirm your identity.

Your my Social Security account makes it easy to see your projected benefit amount at full retirement as well as if you choose either early or delayed retirement. This is important information to include in your budget.

When Can You Apply for Social Security Benefits?

Assuming you qualify for benefits, you may apply for early retirement when you turn 62. However, you will receive a reduced benefit. The age at which you can retire at full benefits depends on when you were born.

  • Between 1943 and 1954, full retirement age is 66
  • 1955: 66 years, 2 months
  • 1956: 66 years, 4 months
  • 1957: 66 years, 6 months
  • 1958: 66 years, 8 months
  • 1959: 66 years, 10 months
  • 1960 and later: 67

Retiring early reduces your benefit while delaying retirement increases it. Social Security adds 8 percent for every full year that you delay retirement. Once you reach age 70, though, your benefits stop increasing.

Planning for retirement

How Do You Qualify for Social Security Retirement Benefits?

As with Medicare, you qualify for Social Security by earning 40 credits. However, Social Security bases credits on earnings.

  • You get one credit for every $1,410 you earn in wages or self-employment
  • You may earn a maximum of four credits each year

Your average earnings over 35 years determine your monthly benefit amount. The higher your earnings, the higher your benefits.

2. What Will You Do During Retirement?

Statistically speaking, once you live to retirement age, you likely have decades of life left. Retirees who fail to plan what they’ll do with these years are more likely to suffer from boredom and even depression.

Start by making a list of the things you expect to do. Take this beyond solo activities like reading and long walks. You’re looking for ideas that will have you eager to get out of bed and start a new day. Some options:

  • Volunteer work keeps you active in your community, introduces you to others who have similar values and interests, and makes life feel more meaningful. It also lets you “pay forward” the love and support someone once shared with you.
  • Part-time work and second careers are popular options for many retirees. For some, their dream job just didn’t pay enough to support a family. Retirement gives them the freedom to do what they always wanted to, like turn a hobby into a small business. Planning ahead makes it much easier to launch your second career or find part-time work that’s meaningful to you.
  • Hobbies tend to feature prominently on people’s list of retirement goals. Unfortunately, if you don’t already have a well-developed interest, chances are that won’t change after retirement. So, find some fun activities now. Join a choir or theater group, take some crafting classes – woodworking, painting, or whatever else intrigues you. Not sure where to begin? Most community centers have an activity calendar on their website.

3. Determine Your Budget

Now that you know how you plan to spend your golden years, it’s time to determine how much “gold” you’ll need.

Financial planners typically suggest you’ll need around 70 percent of the income you had before retiring. But that varies. Since you opened your my Social Security account, you know approximately what you can expect there. But most of us need more than Social Security to survive. Review all of your retirement savings, such as 401(k), pension, and IRA, for a complete picture of your income.

Planning for retirement

Not sure if you’ll have enough? You can stretch your retirement dollars by downsizing your home or moving to a more affordable area. It also helps to delay retirement, at least until you reach full retirement age. And, if you work part-time, that stretches your nest egg even further.

Of course, if you’re planning far enough in advance, you can start increasing your retirement savings now. Are you over 50? If so, you’re allowed to make “catch-up” contributions to both your IRA and your employer-sponsored retirement plan.

4. Apply for Medicare

If you aren’t already collecting Social Security when you turn 65 (technically, three months before you turn 65), you’ll have to apply for Medicare.

Your Initial Enrollment Period (IEP) lasts for seven months. It begins three months before the month you turn 65 and ends three months after. If you delay Medicare enrollment and don’t qualify for a Special Enrollment Period (SEP), you may owe late penalties for the entire time you have Medicare.

If you or your spouse are still employed when you turn 65, you may qualify for an SEP. Our recent post, What Is Medicare Creditable Coverage, explains which types of employer-sponsored plans qualify.

You apply for Medicare via the Social Security website here.

Are you ready to get started? Our Find a Plan tool makes comparing your Medicare plan options easy. Just fill in your location, estimated start date, and hit Continue.

Additional Resources

MyMoney.Gov offers a variety of resources designed to help you plan for retirement. Resources include articles and videos from the U.S. Department of Labor, Consumer Financial Protection Bureau, and more.


Chris Gasparini

Chris Gasparini has been a licensed insurance agent since 2005. He enjoys helping Medicare beneficiaries navigate their options to find the best solution for their unique needs. Chris feels as though his work truly helps people. Because he represents multiple insurance companies and plan types, Chris is able to help Medicare beneficiaries find the best, most cost-effective plan. Every day, he leaves work knowing he did what was right for each and every client he serves.

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Last Updated 12/21/2018