October 2009 e-Wealth Coach
Preparing & Saving for your Retirement Future
This month's e-Wealth coach is Jason J. Fichtner, Ph.D., Chief Economist at the Social Security Administration (SSA). He received his undergraduate degree from the University of Michigan, his Masters in Public Policy from Georgetown University, and his Ph.D. in Public Administration & Policy from Virginia Tech. Social Security programs touch the lives of virtually every American, whether after the loss of a loved one, at the onset of disability, or during the transition from work to retirement. Dr. Fichtner oversees financial literacy research at SSA, developing products that help Americans better understand Social Security benefits and encourage saving.
Dear Saver,
With the current state of the economy, many Americans may not be thinking about preparing for retirement. However, it is important to be saving now, especially since retirement can last a long time. For example, the typical 65-year-old today can expect to spend about 20 years in retirement. So a little planning now can help you meet your retirement goals! In this letter, I would like to share a few resources that SSA provides to help you plan for your retirement.
Your Statement
Good information about your retirement benefits is a key element to a good retirement plan. Social Security has been providing information to Americans to help them plan and save for their retirement through the Social Security Statement. We mail the Statement annually to all workers 25 years and older who are not currently receiving monthly benefits. The Statement is mailed approximately three months before your birthday and provides information on your estimated future retirement benefits, as well as information about disability and survivor benefits.
Your Benefits
A number of factors, including when you elect to begin receiving retirement benefits and your marital history, can influence the benefits you are eligible to receive. To better inform you about these issues, SSA provides additional resources to help you plan for your retirement. The Retirement Estimator is a web-based program that can help you calculate estimated Social Security benefits you may receive based on options you choose, like the age you plan to stop working. You may be able to increase your Social Security benefit by waiting to claim that benefit until you are at your full retirement age or older, up to age 70. If you do wait, you will earn a higher monthly benefit for the rest of your life. Also, if your spouse is eligible to receive benefits based on your record, she/he also will receive a higher monthly benefit.
If you are divorced, you may be able to claim benefits based on your ex-spouse’s record, if you were married for at least 10 years. Also, if your spouse is deceased, you may be eligible for widow(er) benefits starting at age 60, or at any age if you are caring for a child under age 16.
It is important to realize that you can both work and receive Social Security benefits. For those under full retirement age, if you earn over a certain amount some of your benefits will be withheld (but your benefit will be increased at full retirement age to account for the benefits that you had withheld). However, once you reach full retirement age, you can work as much as you want and receive your full benefit amount.
Your Future
Remember, small decisions now can make a big difference down the road. Retiring closer to full retirement age can help the average worker receive $250 or more in additional monthly benefits for the rest of his or her life.
Please note that we are always available to answer your questions. Information is available on our website at www.socialsecurity.gov, over the phone at 1-800-772-1213, or at any of our more than 1250 field offices.
Sincerely,
Jason J. Fichtner, Ph.D.
Chief Economist
Social Security Administration