Factors To Consider Before Retirement- Part I

At the outset the idea of retired life looks attractive to all. After all who wants to go through the daily tough commute to reach office or sit those late hours at office and tolerate that irritating boss. But then think about the positive things these say 20years at work has given you like those great friends that you made at work or the fun of having a daily routine in place. Then there are also financial incentives associated with the delayed retirement.  Also experts feel that working keeps you healthy and fit. Below are few important factors that will make you rethink about your retirement again.

Getting a job again

Before taking that big decision to retire please consider the fact that once you have left the job it would be almost impossible to get another employment again particularly in the current bleak economic scenario where jobs are scarce. So we suggest that if you are retiring from your current job with the hope of getting reemployed then please rethink about your decision. In  the current economic scenario it is almost impossible to get a new job.

The biggest wealth your health

Experts feel that working by keeping you busy and fit keeps you in good health. As per the findings reported in the October issue of the Journal of Occupational Health Psychology people who work part time in retirement report fewer major diseases and are in a better health than people who don’t work. What is important is to be in some activity that keeps one buys be it a job or some hobby and have a routine in place. The physical and mental activities and social contact you have at work goes a long way in keeping you healthy.

Deferred Taxes

After retirement you can withdraw from 401(K) without paying penalty at the age of 55 and from IRA at the age of 59. However on the amount withdrawn income tax is applicable. By delaying withdrawal from retirement account one can buy more time to compound, tax deferred. Until the age of 70 once can defer minimum withdrawals from most retirement accounts.

Higher Social Security amount

Though you are eligible for social security from the age of 62, if you opt for it at this age then your amount is reduced by 25 to 35 percent. Between the ages of 62 and 70 for every year you delay taking up for Social Security the amount is increased by 7 to 8 percent. Also the amount that will be paid to you is finally determined by the 35 most earning years of your work life. By delaying your retirement and hence social security withdrawal you can add up to the social security amount and take a bigger check when needed.