Uncovering Secret Benefits Every Retiree Should Know
Retirement is seen as the golden age of life, a reward for decades of hard work. But, finding our way through all the channels needed to adapt our working life into retirement can be confusing; to know about the many benefits needed. A lot of retirees have yet to tap into the full range of benefits available due to lack of knowledge on the retirement package that can come with life after work. Now, this article sets out to find a little of these rarer benefits, with the purpose of helping retirees better their retirement years.
What is Maximization of Social Security
Social Security can be considered one of the foundations of retirement planning; however, most retirees do not take full advantage of it. A primary tactic is postponing taking Social Security. Although retirees can start gaining benefits as early as the age of 62, they can be boosted by as much as 30%1 a month if they delay taking them until reaching full retirement age (67 for everyone born in 1960 or later). In addition, postponing benefits until 70 provides you with another 8% per year in delayed retirement credits2.
A Look at Health Savings Accounts (HSAs)
Now, Health Savings Accounts (HSAs) are so often ignored in or around retirement, but they offer a great way to pay for healthcare expenses on a tax-advantaged basis. HSA contributions are tax-deductible and distributions for qualified medical expenses are tax-free [3]. Retirees who saved up with an HSA can use this money for their Medicare premiums, dental expenses, and other out-of-pocket costs. Of note, penalties for non-medical withdrawals from an HSA cease after the age of 65, allowing them to be withdrawn (if income-taxed) for any purpose3.
Taking Advantage of Senior Discounts and Offers
There are many discounts and programs for seniors and not many folks take advantage of it. From savings on travel and meals, to retail and entertainment, these can help retired budgets go a little further. Because of this, many national parks have lifetime senior passes that cost a lot less than the cost of an annual pass4. Also, AARP offers a number of discounts and resources to seniors.
Pension, retirement account strategy
With pensions or retirement accounts, such as a 401(k) or an IRA, the timing of withdrawals has a larger effect on both tax liability and your long-term financial security. At age 725, Required Minimum Distributions (RMDs) must be taken from these accounts—which is something for retirees to be mindful of. These funds need to be managed properly so the tax implications and the cash run out sometime after you do.
Seating Community Resources and Support
There are many resources available for retirees in most communities from meal delivery to transportation assistance. These services are invaluable for helping retirees remain independent and maintain a good quality of life6, and can be found through local Area Agencies on Aging (AAAs). Further, joining in volunteer opportunities will not only be a way for you to give back, but a way to connect with others socially and find a sense of purpose.
Getting to know these benefits, and how to efficiently apply them, can be the difference between a good and bad retirement for many people. Business Insider DeutschlandBy capitalizing on Social Security, utilizing HSAs, getting discounts, optimizing retirement accounts, and leveraging community assets, retirees can boost their financial stability and quality of life.