Social Security claiming strategies, withdrawal rates, and retirement income sources for financial planning.
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- At what age can you first claim Social Security benefits?
- Age 62.
- What is full retirement age for someone born in 1960 or later?
- Age 67.
- How much lower is your Social Security benefit if you claim at 62 instead of 67?
- Approximately 30 percent lower.
- What is the age at which you receive 124% of your full Social Security benefit?
- Age 70.
- What is the primary advantage of delaying Social Security to age 70?
- Your monthly benefit increases by 8% per year you delay past full retirement age.
- What is the 4% rule in retirement planning?
- You can safely withdraw 4% of your retirement portfolio in year one, then adjust for inflation, without running out of money over a 30-year retirement.
- Which retirement account allows you to withdraw contributions (but not earnings) at any time tax-free?
- Roth IRA.
- At what age must you begin taking required minimum distributions from a traditional IRA?
- Age 73.
- What is the primary tax advantage of a 401(k) plan?
- Contributions are made with pre-tax dollars, reducing your current taxable income.
- How much can an individual contribute to a 401(k) in 2024 (under age 50)?
- Up to $23,500 per year.
- What is a pension?
- A retirement plan funded by an employer that pays a fixed income to employees during retirement.
- What does an annuity provide in retirement?
- A guaranteed stream of income, usually for life, in exchange for a lump sum payment.
- Name three primary sources of retirement income.
- Social Security, pensions, and personal savings/investments.
- What is sequence of returns risk?
- The risk that poor investment returns early in retirement deplete your portfolio faster than expected.
- At what age do you become eligible for Medicare?
- Age 65.