Develop a Social Security
& retirement date strategy

 
While Social Security will provide only a portion of your retirement income, it's an important component and should be a major part of your retirement strategy.

Evaluate the impact of delayed retirement

Longer life expectancies lead many people to consider working longer to continue building their nest egg. Postponing retirement may be beneficial, because you can:
  • Continue making contributions to your workplace retirement plan if you have one, or to a traditional or Roth IRA.
  • Give your assets more time to potentially grow and, in the case of traditional 401(k)s and IRAs, you'll also extend the period of tax deferral for your investments.
  • Make a final push to contribute as much as possible and take advantage of catch-up IRA and 401(k) contributions if you're age 50 or over.
Read:
About 86% of those who
retire at age 70 will be
able to maintain their
standard of living;
just half of all those who
retire at age 66 will
be able to do so.1
How waiting to collect
Social Security can boost
your benefit

Read topic paper

Consider taking Social Security benefits later

The older you are when you file for Social Security benefits, the higher your annual payment until you reach age 70, when benefit increases cease. You can choose to take Social Security later, even when you retire.
Waiting can add up: Your benefit grows by approximately 8% each year from age 62 (the earliest age you can begin collecting) until age 70. Claiming at age 70 instead of age 62 increases your lifetime monthly benefit by 76%.

Weigh the option of working in retirement

Today, most pre-retirees say they would like to include some work when they retire (although health issues or loss of a job could affect those plans).
Working during retirement could help you:

Build your retirement portfolio: If you extend your working years, you can continue to make retirement contributions, which could make a difference in the type of retirement you can afford.

Benefit from compounding: Working even part-time in retirement can help you delay drawing income from Social Security and your own savings, allowing your funds to continue to grow.

In your Social Security
timing decision, consider
factors such as your
health, life expectancy,
marital status, retirement
assets and risk tolerance,
as well as your current need
for income.
71% of pre-retirees say
that, ideally, they would
continue working
in
some form during their
retirement years.2

Consider annuities to supplement retirement income

With retirement typically lasting 25 or 30 years and beyond, it's important to create a retirement investment strategy that can convert your savings into retirement income.
If you're looking for an investment vehicle that can guarantee an income stream for life, then you may want to consider annuities. Simply put, annuities could help ensure that you won't outlive your savings.
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Footnote 1 "Why You Should Plan to Work Until Age 70." Emily Brandon. U.S. News & World Report.com (2012).

Footnote 2 "Americans' Perspectives on New Retirement Realities and the Longevity Bonus." Merrill Lynch/Age Wave (2013).

All annuity contract and rider guarantees, including optional benefits or annuity payout rates, are backed by the claims-paying ability of the issuing insurance company. They are not backed by Merrill Lynch or its affiliates, nor do Merrill Lynch or its affiliates make any representations or guarantees regarding the claims-paying ability of the issuing insurance company.

This material should be regarded as general information on social security considerations and is not intended to provide specific social security advice. If you have questions regarding your particular situation, please contact your legal or tax advisor.

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