GUEST POST from Don – Preretirement

PRETIREMENT

Stage A – The 7 years before actually laying down the shovel and sleeping in.*
Study everything you can find.  Make sure your investments are balanced.  Make sure your types of accounts are balanced.  Double check your future needs and wants.  Stay married or get married (it can be a financial boost).  Consider MOVING to another state… (FL, MS, PA, TN, TX, and some others do not tax things like Social Security, pensions, AND IRA [401k, etc] distributions.  If those will be your largest sources of retirement income … moving to another state could save $2,400-4,800 every year.  Example:  Sure! Moving from California to Missouri could save over 26%, but even Michigan to Kentucky will save ~ 4% on living expenses … on a $60k retirement income that’s $200 every month [and spring comes a few weeks earlier].)

Stage B – 15 years before the big day.
Invest fast and furious.  15-20% of every paycheck fast.  
Begin paying down debt with a plan to be debt-free.
Make a will.

Stage C – 30 years out.
Open investment accounts and fund them as you can.  There are lots of unknowns, but doing something early is much better than doing nothing when it comes to investing.  Learn about investments and types of investment vehicles (401k, IRAs, Roths, Gold, anything, everything).  This is a good time to be investment smarter.  Working parents should protect the family with term life insurance policies.

Stage Zed – Adulthood or 18 (whichever comes first).
Realize: no one has your back when it comes to your future.  It is all on your shoulders.  The more responsible you are the better your results will be.  The young you hates the old you and the old you will despise the young you.  

Life Expectancy

We all want to make decisions based on Fact.  So, how long will we live?  Simple answer:  “No one knows.”

But it gets a lot more complicated.  Do you realize that the Social Security Administration “knows.”  At least, they know the probabilities.  You should too.  Type this into your search engine “Actuarial Life Table Social Security”  Viola!  You now know a few things you did not before about how to plan.

For instance, should you take Social Security benefits at age 62, 65, or 70?  What good are MORE benefits per month (waiting until age 70) if you won’t live to enjoy it!!!  What good is far LESS per month (jumping in at 62) if you are going to live until age 99?

According to the actuarial table if you turn 62 this year and are male, the AVERAGE (not median) expectancy is 19 more years of life (to age 81).  But that’s not the whole story, because if you are one of the fortunate ones who survives 3 more years you likely have 16.95 years left (almost to age 82).  Even more importantly, if you survive to age 70 you likely still have 13.69 years remaining (83.69 years of age).  81 to 84 is your (50% probability ) “use by” date.  If you wait until 70 to begin collecting benefits there is a 50% probability that you will fail to receive all the benefits you could have received.  If you begin your benefits at age 62 there is a greater than 50% probability you won’t receive all the benefits you could have had.  

Something no one reports… There is a SWEET SPOT when considering benefit amounts and longevity.  If you start your benefits (as a man) between age 64 and 66 there is a greater than 50% probability you will receive far more benefits overall than if you started at 62 or 70.  

Second important factor:  Whose benefits are greater?  A married person with higher benefits who wants to provide for his/her spouse after departing this life … may want to wait until FRA  (Full Retirement Age) in order to provide a few hundred more per month for his/her spouse.  (Delaying even one month past FRA does not add a single penny to spousal benefits.)

Factors for when to begin SS benefits:

1. Health.  If you are in good health at age 62, there is a high probability that you will receive more lifetime benefits if you wait a year or two.

2. Employment.  It matters if you are still employed when you begin your benefits.  You can begin at age 62 if your employment income is below* $2,000 per month.  If you are still working the YEAR of your FRA you can begin taking benefits if your income is below* $4,500 per month.  If you are self-employed forget taking SS benefits until you are at FRA no matter how much you make (SSA makes it very difficult to get benefits before then).  Once you have achieved FRA you may earn in excess* of $8,500 per month from employment or self-employment. (*Numbers change annually.  Study Social Security Administration documents for more info.)

3. Gender.  Male – less than 50% probability of value in waiting until age 70.  Begin at FRA or up to 2 years before FRA.
Female – best to wait until FRA.
Dependents.  The more income your dependents will need, the greater the importance of waiting until your FRA to take benefits.

4. Life Expectancy.  Men who have achieved age 62 have a 50% probability of living until age 81. Men who have survived until age 70 have a 50% probability of living until nearly 84. Women average up to 3 additional years.
5. Poverty.  If you won’t have enough money to survive without Social Security at age 62, then ignore all the above.

RETIREMENT REGRETS:

Can you guess the biggest regrets of retirees?  You are going to say “no duh!”

Not saving enough.
Taking Social Security too early.  
Retiring Too Soon…1/3rd of retirees regretted not working longer..
Still in Debt…Don’t be one of the 70% who retire with debt.

Copyright 2025 Donald Whelpley

[PLEASE NOTE that Don is always open to discussing the thoughts and opinions he shares here and welcomes comments as shared in the comment section. He doesn’t use other social media platforms and won’t see whatever you’d like to share with him if you post it elsewhere.
ALSO, Don is always open to offer his thoughts on various topics. If you have a specific request, you can let him know in a comment; he reads – and replies to – them all. ~ Sherry]

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