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September 23, 2016

Penelope WangIt’s hard to overstate the importance of the timing of your Social Security claim—the longer you wait to start benefits, the more your eventual monthly check grows, sometimes by 25% or more. But many workers don’t fully understand the implications of their decision and claim as soon as they can. The Social Security Administration should make it very clear how much early claiming may cost you. Yet the agency’s customer representatives frequently provide inconsistent or inaccurate information, a new government study finds. In speaking with individuals, they also tend to ignore the impact of the filing decision on a spouse and dependents. If you plan to claim Social Security, you need to fully understand how your benefits, and those of your family members, are affected by the timing of your claim. And consider adjusting your withdrawal strategy or working a bit longer so you can afford to delay. Where else can you get a government-guaranteed, inflation-adjusted income stream that lasts a lifetime?

Best wishes,

Penny

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THIS WEEK’S RETIREMENT NEWS, INSIGHTS AND ADVICE

The Right Way to Turn Your 401(k) Into Retirement Income

As baby boomers move into retirement, many face a big challenge: figuring out how to tap their nest eggs for income. Few 401(k) plans have retirement income options, so devising a plan is up to you. Contributor Walter Updegrave offers four helpful steps—starting with figuring out how long your money needs to last. MONEY

5 Things to Do Now to Get Ready for Retirement

The five or so years before you retire are what’s known as the red zone. It’s that crucial period that offers you a last chance to catch up if you’re behind in your saving and planning. So if you haven’t done a retirement check-up, these five tips from columnist Rodney Brooks will give you a head start. WASHINGTON POST

What to Do If Your 401(k) Plan Has High Fees

The fees for 401(k)s have been dropping, but not for all plans. If you’re stuck in a high-cost plan, you need to use it strategically. These guidelines can help you max out the breaks while minimizing fees. Hint: Don’t miss out on your employer match. US NEWS

These 13 States Tax Social Security Benefits

Some 60% of retirees rely on Social Security as a major source of income. The majority pay federal tax on those benefits, and in 13 states you may pay state tax as well. If you need to keep as much of your benefit as you can, better check the rules before you decide where to retire. Think twice about Minnesota. MONEY

Lost Track of a 401(k)? Here’s a Plan to Find the Money

Most of us have changed jobs a few times, leaving behind a pension or 401(k). Over the years employers change too, through mergers or buyouts. So at retirement, you may have no idea where your savings went. Writer Ben Steverman provides tips for following the money. BLOOMBERG

8 Brutal Truths About Retirement

For retirement investors, it’s all too easy to get bogged down in details—whether to choose this fund vs. that fund, or which account to use. Blogger Roger Nusbaum provides a sharp focus on the few issues that really matter. My favorite: A $10,000 part-time job is like another $250,000 in your portfolio. RANDOM ROGER

A Conservative Retirement Portfolio in 3 Buckets

When you’re in retirement, you may not be able to tolerate big swings in the market. If that’s the case, consider this conservative asset mix, recommended by Morningstar’s Christine Benz. It favors steady fixed-income funds, but retains a small stock allocation to ensure you get some growth too. MORNINGSTAR

Alzheimer’s Can Mean Steep Costs for Caregivers

If you are caring for someone with Alzheimer’s or another dementia, you are likely to spend a lot more than if you were helping an elder with other needs. Medicare does not cover most long-term care costs, so unless your family member qualifies for Medicaid, most of the bills must be paid out of pocket. So check out our advice here and in our package of stories on Alzheimer’s. MONEY

Why a 70-Year-Old Retiree Went Back to Work—as an Intern

Perhaps you happened to see the movie “The Intern,” which featured Robert De Niro working for an e-commerce start-up. Turns out, there’s a real life counterpart. Paul Critchlow, a high level communications executive, had retired but felt unsatisfied. Writer David Zak reports on Critchlow’s experience interning alongside college kids at Pfizer. It’s a long read, but it will have you thinking about how you’ll be spending your time in retirement. FAST COMPANY

YOUR RETIREMENT QUESTIONS ANSWERED

The One Big Advantage of a 457 Retirement Account

Q: What is the smart play on my 457(b) retirement plan, which has a $600,000 balance? I’m retiring at 54 and wonder if I should roll it over into an IRA or keep it in the 457(b).—Brett in Atlanta

A: You raise an interesting point for savers in 457(b) plans. These defined-contribution retirement savings plans are offered to public-sector employees and are similar to other employer-sponsored plans like 401(k)s in many respects—save for one big difference. READ MORE

WORDS OF WISDOM

“You never know what is enough unless you know what is more than enough.”

Poet William Blake

ABOUT PENNY: Penelope Wang is editor at large at MONEY with a focus on retirement planning. A graduate of Swarthmore College and Columbia University School of International Affairs, she was recently ranked among the "top social influencers in personal finance and wealth." You can email her at retirewithmoney@moneymail.com and follow her on Twitter @PennyWriter.

 
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