Best Month to Retire Based on Your Birthday
Many think and plan what year they will retire, but not as many give consideration to the particular month they should get that party started.
There are several key issues to consider when choosing what month to retire. For example, if you intend to claim Social Security, you must consider the impact that your exit date has on your benefits. FRA was once universally set to be at age 65 for everyone is now based on our birth year.
For those born in 1960 or later, it's 67;
For anyone born in 1959, it's 66 and 10 months;
and for anyone born in 1958, it's 66 and 8 months.
Claiming benefits the month you reach your FRA allows you to avoid reductions, while claiming early reduces your monthly checks by about 5-6% per year. For example, if you're turning 66 in January 2025 with an FRA of 66 and 10 months, retiring in the month of October would be the best choice to get your full benefit rather than before or after.
On the other hand, if you want the absolute maximum benefit, you'll want to retire the month you turn 70. Any sooner would reduce your checks and any later would mean giving up money for no reason since delayed retirement credits can only be earned until 70.
Other key factors include your health or long-term care insurance. Ensuring continuous health coverage may be considered crucial, especially for those retiring before they qualify for Medicare at age 65. Retiring just before your Medicare eligibility month could mean needing temporary insurance to bridge the gap. Additionally, if you’re retiring from an employer with retiree health benefits, some plans might cover this gap until Medicare kicks in, but it’s essential to confirm those details with your employer. Your long-term care insurance may also hold age eligibility, so if you’re planning to use your policy, you may want to check on what age benefits apply.
Another factor includes your potential pension or 401(k), and taxes. Retiring early in the year before you've earned your full annual income will help you limit your taxable income from your job and potentially avoid taxation on Social Security benefits. If you are eligible for a pension, some employers calculate payouts based on your final year of earnings, or they might increase payments slightly if you retire at certain times of the year. Reviewing your pension plan’s rules for withdrawal timing could inform the best month for retirement. Similarly, withdrawals from a 401(k) or other retirement accounts can be managed more effectively when you align your retirement date with a lower-income year, reducing the tax burden on those distributions.
As you think about your future care options, your lifestyle choices and preferences can also play a significant role. If staying in the comfort and familiarity of your own home is important to you, there are ways to make that goal easier and more supportive. For many reaching retirement age, the idea of moving to an independent or assisted living facility may not feel right yet. Such options, while helpful for some, can come with additional expenses and often mean giving up a certain level of independence.
Choosing to remain at home, however, may eventually require a bit of extra assistance, and that's where Home Care services can be a valuable resource. Home Care offers compassionate support tailored to your specific needs, whether it's an extra hand to help with light housekeeping, companionship, meal preparation, transportation to appointments or social events, or even support with daily activities like dressing and bathing, allowing you to safely and gracefully age in the comfort of your own home for as long as possible. With Home Care, you can keep the comfort and routines you cherish, knowing there’s someone there to lend a hand when necessary. Home Care isn’t just about providing services—it’s about making it possible to continue living life on your own terms while feeling safe and supported.
In conclusion, an early consultation with a financial advisor can provide tailored guidance based on your unique financial and personal circumstances and goals, ensuring that your retirement date fully supports your desired lifestyle and financial security. And when the time comes to consider this choice, reaching out to Finnish-American Home Care to discuss your specific needs can be a great first step. After all, everyone deserves to feel comfortable, cared for, and at home, wherever that may be.
This article contains excerpts from an MSN article written by Christy Beiber.
The information provided by Finnish-American Village is for thought-provoking and informational purposes only. It is not intended as medical advice or as a substitute for professional healthcare. Please consult your physician or a qualified healthcare provider to discuss your personal needs, requirements, and any medical concerns you may have. Always seek the advice of your healthcare provider before making any decisions or changes related to your health and well-being.