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As you prepare for retirement, keep these 3 key points about retirement income in mind.Preparing for retirement is a big project, and there are many things you need to pay attention to when transitioning from working life to retirement.If you want to live a smooth retirement life, these three financial preparation points are critical and must be taken into consideration:
1. 40 points – the threshold for receiving government pension benefits*
When planning for retirement, the most basic social security retirement benefits need to be obtained through points.
Through work, we will earn Social Security (social security) benefit points.The number of points required to qualify for Social Security benefits depends on your age and the type of benefit you apply for.For most people, 40 points are needed to receive government retirement benefits.
Each person can earn up to 4 points per year.
- In 2022, one point will be claimed on $1,510 in income
- In 2023, one point will be claimed on $1,640 in income
In 2023, one point will be claimed on $1,640 of income.The income requirement to accumulate 4 points is 6,560.
2. Official retirement age 67* – for most people
Under federal law, individuals who receive Social Security benefits and who have not yet reached official retirement age are entitled to receive all retirement benefits if their income is below the limits described below.
For those born between 1943 and 1954, the official retirement age is 66.The official retirement age is increasing year by year.For those born in 1960 or later, the official age is 67.
If you are at or above official retirement age:
- 2022, no income limit
- 2023, no income limit
If you have not reached official retirement age,For every $2 above the limit, $1 will be deducted from benefits.
- In 2022, the income limit is $19,560
- In 2023, the income limit is $21,240
If you reach official retirement age,For every $3 above the limit, $1 will be deducted from benefits.
- In 2022, the income limit is $51,960
- In 2023, the income limit is $56,520
3. Social Security pensions are not the only source of guaranteed retirement income.
Social Security pensions are the most basic safety net for retirement in the United States.It provides retired people with a "guaranteed" lifetime income cash flow.
This guaranteed lifetime cash flow method is the key point we need to learn.
We may also intend to obtain retirement income from many different places - such as from investments, but this type of income is not a guaranteed source of income.
If we really want to add more guaranteed income to our retirement cash flow each month, thenIncome annuity.Retirement Annuity with Guaranteed Monthly Income Cash Flow, may need to be considered when planning for retirement.
According to the interest rate estimation in the previous column, at the age of 50, with a principal of US$100 million, under the current (as of 11/28/2023*) high market interest rates, you can open a retirement income annuity account and let the insurance company take care of it 10 years later , start receiving lifelong pension after the age of 65, how much money can you guarantee every month?
~ $ 10,700/Month
Based on a monthly withdrawal of $10,700, the cumulative pension received each year is close to $128,000.In the 8th year after receiving the pension, the principal will be returned, and the pension will continue to be paid for life based on this monthly income.
In the same way, people aged 0-50 can also open an annuity account in advance, save regularly, and make savings plans to ensure monthly cash flow. (Full text ends)
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(click to enter:Self-service quote for US dollar retirement account)
(*The information provided on this post has been developed by thelifetank.com for general informational and educational purposes for Asian American community. The Information should neither be construed as a provision of personalized financial or insurance advice nor as a guarantee that a certain level of results will be achieved. The author is not a tax or law firm, and does not provide tax and legal advice. The information contained in this article should not be construed as providing personalized financial or insurance advice and is not intended for sale. The author It is not a tax or law firm and does not provide tax or legal advice.)
*2023 SSA Publication CH-S-05-10003
