Tag Archives: Financial Planning

Age Milestones for Retirement Planning

Age Milestones for Retirement PlanningWhether you’re 22 or 52, you should be planning for retirement.

NYSLRS retirement benefits are based on tier status, years of service, and average salary. Age is also an important number, and not just the age when you plan to retire. Here are some age milestones to keep in mind while planning for your retirement.

Under 50: It’s never too early to start saving for retirement. Even modest savings can add up over time as investment returns grow and interest compounds.

50: The Age 50 and Over Catch-Up provision allows you to save more pre-tax dollars in a retirement account starting in the calendar year in which you turn 50.

55: The earliest age most NYSLRS members can retire. (Does not apply to members in special retirement plans.) Your pension may be permanently reduced if you retire at 55.

59½: The age you can draw down money from a tax-deferred retirement savings plan, such as an IRA, without facing a potential federal tax penalty. (The penalty does not apply to New York State Deferred Compensation savings if you are retired or have left public service.)

62: Full service retirement age for Tiers 2, 3, 4 and 5 and PFRS Tier 6. Earliest age you can begin collecting a Social Security pension, but the benefit would be reduced. For more information, read When to Start Receiving Retirement Benefits.

63: Full retirement age for ERS Tier 6 members.

65: Age most people are eligible for Medicare benefits.

66: Full Social Security retirement age if you were born from 1943 through 1954. Add two months for each year from 1955 through 1959.

67: Full Social Security age if you were born in 1960 or later.

70: If you do not take your Social Security benefit at full retirement age, your benefit will increase each year until you reach age 70. Delaying Social Security after 70 will not increase your benefit.

70½: If you have tax-deferred retirement savings and are no longer working, you must begin withdrawing some of this money after you turn 70½.

One Last Number: Having a rough idea of your life expectancy is essential to retirement planning.

For more information about retirement planning, read our publication Straight Talk About Financial Planning For Your Retirement.

Who Are Financial Planners?

When you’re preparing for retirement, you want to avoid costly mistakes. And while hiring an attorney or accountant may help, think about hiring a financial planner too. A financial planner can help you develop a practical plan to help you meet your retirement goals.

What Do Financial Planners Do?

Financial planners do not manage your money. According to the Financial Planning Association of Massachusetts, financial planners assess your current financial health. They examine your assets, liabilities, income, and more. They help you develop a realistic plan to meet your goals by looking at your financial weaknesses and strengths. With their help, you can put your plan into action and keep track of its progress. If your goals change over time, they can also help you adjust your plan.

Choosing a Financial Planner

Retirement-Savings_5-Rules-to-RememberIf a financial planner has a CFP next to his or her name, that means they are a certified financial planner. Certified financial planners have passed a national test given by the Certified Financial Planner Board of Standards. The certification test covers:

  • Insurance
  • Investments
  • Taxation
  • Employee benefits
  • Retirement and estate planning

Certified financial planners must also abide by a code of ethics.

Do Your Research

Choosing a financial planner is like hiring any other professional. Make sure you do your research so you can make a well-founded decision. While we can’t offer specific advice about hiring a financial planner, there are some things you should keep in mind:

  • Check credentials, educational background and experience.
  • Find out if he or she is a member of the Certified Financial Planner Board of Standards.
  • Get referrals from people you trust – ask friends, relatives and business associates.
  • And finally, don’t be afraid to ask questions:
    • Do they research the financial products they recommend?
    • Do they offer a free consultation?
    • Are they paid by fee, commission, or salary?