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Control Your Retirement



Everyone wants control over his or her life, but never more so than when planning for retirement. And, with the current economy, it seems even more important to lean to make those preparations.

One helpful tool is Dana Anspach's book, Control Your Retirement Destiny: Achieving Financial Security Before the Big Transition.

This retirement expert lists the following most important step:

Social Security Claiming
The biggest decision for most couples will be coordinating their Social Security claiming decision. Often one spouse is the higher earner. With proper planning the high earner can delay the start date of their Social Security to 70. By maximizing the higher earner's amount, it then becomes a powerful form of life insurance for either spouse who may be long-lived. Sometimes this high earner can also collect a spousal benefit for a few years prior to their age 70. For many couples, using the right Social Security strategy can deliver the same result as if they had an extra $100,000 (or more) in the bank the day they retired. Social Security claiming plans are best used when they are coordinated with other aspects of retirement income planning.
 
Pension Benefit Elections
Joint life expectancy should be part of the decision making process for choosing pension options. For example, in one case the husband was twelve years older than the wife. When we went to elect the type of payout on the wife's pension we elected something called life-only with ten years certain. This means the pension is guaranteed to provide income for the longer of ten years or her life. Based on their age differential and women's longer life expectancy, this made sense for them, as she is likely to outlive him. Contrast that with a similar decision we faced with a husband's pension. He was nine years older than his wife. We recommended he choose the joint life payout option, as once again, she is likely to outlive him. In both cases the goal was to choose a strategy based on their joint life expectancy, but it lead to different recommendations.
 
Widow/Widowers and Social Security
I also see many cases where a widow or widower is not taking full advantage of their Social Security survivor benefits. They have the option of filing a restricted application for just their widow/widower benefit while allowing their own benefit amount to continue to accumulate. They can later switch to their own benefit amount. Social Security representatives will not inform them of these options, but will simply suggest they file an application. 
 
Coordinating Taxation of Retirement Income
Couples can increase their after-tax income by viewing their projected retirement income as a household and looking at the taxation of that income. Careful planning as to which accounts to withdraw from in which years can reduce a retiree's tax burden. This type of planning entails a retirement income timeline, which shows exactly when different source of income are expected to start. By rearranging this timeline based on expected tax brackets in many cases multiple thousands of dollars can be saved. 
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DR.JOB Q.and A.: Same Genes, Different 'Genes'

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