When the retirement date approaches most of us we begin to ask questions about different issues that may affect our life as retirees and the financial planning of this stage of our life. These doubts tend to appear in the 55-60 age group and although there are still a few years left for retirement, it is convenient to have some questions about retirement, which avoid us making mistakes without room for action.
In addition, the public pension system is in the process of transition so consider a 2020 Medicare advantage plans comparison This period of transition causes more doubts among those who retire before the year 10-15 years. Here are some clarifications to some of these issues:
Ordinary retirement age:
The most well-known change introduced by the latest update of the public pension system is the delay in retirement age to 67 years after 10-15 years. Until reaching the next 10-15 years, the ordinary retirement age will be increased little by little, so that the retirement age for workers who retire currently is 65 years and 5 months.
In any case, we can always retire at age 65 when we have a full working life, that is, we must have paid Social Security (SS) for 38 years and 6 months. If your planned retirement date is before 10-15 years, it is advisable to visit the Social Security website where you can find the ordinary retirement age that applies in each year.
Requirements for access to retirement:
A few years back, the age of access to the retirement pension depended on the age of the interested party and the contributions accumulated throughout his working life, requiring having reached the age of:
• 67 years old
• 65 years when 38 years and 6 months of contribution are credited
If I retire before, will my pension be reduced?
Yes, one of the drawbacks of accessing retirement early is that it means a reduction in the amount of the public pension to be charged throughout life as a retiree. In the two cases mentioned above, the pension will be reduced by applying the following coefficients for each quarter that anticipates retirement with respect to the ordinary retirement age of each year: Consequently, it is advisable to reduce exposure to assets with higher risk, such as variable income, and to transfer (transfers between plans have no costs to the client) part or all of the accumulated assets to pension plans with a more conservative profile, and thus avoid shocks in the last years before retirement.