Plan for Retirement with Social Security Benefits in Ridgewood, NJ

Learn about spousal benefits in Ridgewood, NJ, with our help! Are you ready to walk away from work and the income it provides? For most married couples, retirement may very well include 30 years of life expectancy, which requires rising income to meet rising expenses. Could your finances be improved by another year or two spent in the workforce? Maybe an extended period of part-time work makes sense to you. Let Vaughan & Co. Securities, Inc. help you make an appropriate retirement planning timeline decision. Based in Ridgewood, NJ, our financial advisory firm offers some thoughts from our clients who have retired successfully.

What will you do next? Or have you already started doing it? Most of our clients like their job most of the time. A new retiree certainly deserves a few weeks of downtime. But after the initial rest, you will want to become productive. Many retirees make a mistake when they do not know what they are going to do without work. This is a good reason to keep working! You might want to travel, volunteer, explore new hobbies, or take on a part-time job. You should have a plan for what your retirement will look like and what you want to do if you stop working. Start the post-retirement activity before you retire. You may want to experiment. In addition, you have to know how much retirement life will cost.

Retirement Is on the Horizon

Inflation doesn’t go away simply because you are no longer working. That is why it is essential to sit down with an investment advisor to start discussing your monthly expenses, how they will grow, and how you will be able to afford them once you retire. We help you address the ever-rising monthly expenses in retirement and guide you toward having the money you want to do the things you’ve always wanted to do—whether it’s creating a home garden or traveling the world.

Once you have a sense of your expenses, our team will estimate how much income you will have coming in from Social Security, pensions, and annual withdrawals from your investment accounts. Since those annual withdrawals depend on future investment returns—and the future is always unknowable—we take the time to have an extended conversation about a reasonable estimate of those returns. The reasonable estimate of those return returns will be driven by how much of your investment program is invested in stocks of well-managed and well-capitalized businesses.

Finally, we create an estimate of your future income. If your income does not cover your monthly expenses with a little cushion, then you will likely not be able to retire the way you want—or at all. That means it is time to start planning now for your retirement tomorrow so that when the time does come, you won’t find yourself coming up financially short.

Preparing for Your Retirement

Have you ever stress-tested your retirement finances? Successful retirement planning involves planning for unexpected expenses. One client told me that “Financial emergencies happen every six months, but you can schedule them.” We will keep a meaningful amount in cash reserves, maybe municipal bonds, for these emergencies.

We know that markets fluctuate. We want to prosper in retirement, and we expect that our financial matters will not go smoothly. A significant decline in your investments is a routine event. We should have a plan in place to address market downturns. Skilled nursing care or an assisted living stay can cost thousands more per month. We should be prepared with an emergency fund to help cover these costs in retirement.

So, when should you start planning for retirement? Today! The sooner you begin planning for your retirement, the sooner you will be able to start to see the prosperity you want for the future. Our team reviews all of your individual benefits as well as spousal benefits to help you plan for a happy and comfortable retirement.

Collecting Benefits at Full Retirement Age

Your benefits, known as your Primary Insurance Amount (PIA), is the monthly benefit for which you are eligible at your full retirement age (FRA). Your FRA varies based on the year of your birth. Initially, that age was 65, but today life expectancy is much closer to 78. Since Americans are living longer, it is crucial to ensure that our retirement finances can last longer as well.

The Social Security Administration (SSA) uses your highest 35 years of employment to arrive at your Average Indexed Monthly Earnings (AIME). If you continue to work after reaching FRA, the SSA will automatically recalculate your benefits each year you continue to work. That means if your current income is greater than any of your previously calculated “highest 35 years,” your benefits will be adjusted upward. Additionally, social security retirement benefits are automatically modified each year for inflation. This is known as Cost-of-Living Adjustments (COLAs). For more information, go to www.ssa.gov

Learn more about social security by clicking on the attached PDF files:

Social Security Benefits
Social Security Memo

Contact us if you have questions about pre-retirement investment advising services. We proudly serve clients in Ridgewood, Bergen County, and throughout the greater Northern New Jersey area.