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I always admire people that retire early. By early I mean before the age of 65. To me, it means they did a good job of financial planning and now they can leave their employer with no money worries. As I get closer to retirement, of course, my contemporaries are getting closer to retirement as well. One friend of mine was absolutely delighted to find out that he could actually get a check at age 62. I tried to convince him to wait until 65 for a bigger check, but he wanted his money as soon as possible and I totally understand. There are some days when I wake up and I just want to stay home, but that is not going to happen for a while. Another friend who recently turned 62 also wanted to apply for social security and thought he could still go to work every day.

As a friend of mine used to say, “somebody told you wrong.”

I have saved an article from a financial magazine just for these moments. It says retiring early can cost you over a quarter of a million dollars. I don’t know about you but I can’t leave any money on the table. To begin with you will give up income you would have earned during what might be the best-paid years of your career. Also, Medicare won’t cover you until age 65. You can go out and buy individual health insurance but the cost will be high. Perhaps Obama Care would be an option for you, but the bottom line is you will have to pay for it.

Here is where the big bucks come in; let’s look at our worker, we will call him Jay Doe, he had a median income of $55,500. He quits working in 2014 at age 62, but his full social security retirement age is actually 66. These four years will cost him 4 years of income, $220,000. Next, the Social Security Administration says his benefits will be reduced by about $403 dollars a month for life. So if Doe lives to be 78, that will cost him $8,899 if he lives to be 85, $42,751.

Perhaps you are thinking of getting a part-time job or another full-time job to cover the gap. Not so fast. If you don’t wait until full retirement age you are limited to the amount of money you can make on top of your Social Security. If you don’t believe what I’m telling you, just go to the Social Security website and see.

SSA used to send out a yearly analysis of what you will receive and when, but you can look at it as often as you like on line. This is a subject that you need to do your homework on. While you are checking on it see what the premiums will be for health insurance, I think you will be surprised. I couldn’t imagine walking around without health insurance. The experts say, if you are in good health wait until full retirement age.

(Email the columnist at debbienorrell@aol.com)



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