New Tool Helps with Retirement Planning

A new online tool from the Consumer Financial Protection Bureau (CFPB)  is designed to help Americans with retirement planning, including decisions about when to claim their Social Security benefits.

With Americans living longer, retirement planning often involves tough decisions, and trade-offs. And the claiming-age decision regarding Social Security is a big one. CFPB said that its new Planning for Retirement is an interactive, online tool that shows how different choices play out over time.

When Should You Claim Social Security Benefits?
Americans are eligible to claim their full Social Security retirement benefits at their full retirement age, which, for people born after 1942, ranges from age 66 to 67, depending on the year the person was born. However, consumers can also claim their benefits several years before, agreeing to take less money each month. Or they can claim several years after, and get bigger monthly checks.

CFPB cautions that, generally, the amount a consumer receives from Social Security is a one-time choice. So, this is a big decision. If a consumer claims the reduced or increased benefit, they receive that amount for the rest of their life, with annual cost-of-living adjustments. This decision also impacts the benefits an older consumer’s surviving spouse will receive after their death. With this tool, Americans can see the impact on their future finances of making a decision to take reduced benefits earlier than full retirement age.

Find Out the True Cost of Failing to Save for Retirement
People can see how important it is to provide for other sources of income at retirement (by saving and investing through life), since even full Social Security benefits are usually inadequate to provide people with the lifestyles they enjoyed when working. More dramatically, this tool will show how meager the reduced benefits will be if someone opts to take their Social Security benefits before full retirement age. In such cases, it is absolutely essential that a person have other sources of income besides Social Security. Not everyone realizes this, and it’s good to have it spelled out in dollars and cents over time.

This tool can be accessed found at: http://www.consumerfinance.gov/retirement.  Click on over, use the tool, and you’ll soon realize why financial planners are adamant that all Americans save for retirement throughout their working lives.