Some American workers do not qualify for Social Security retirement benefits. Workers who don't accrue the requisite 40 credits (roughly 10 years of employment) are not eligible for Social Security. Some government and railroad employees are not eligible for Social Security.
Private employers are not required by law to offer retirement plans. Although Social Security benefits are somewhat uncertain for future generations, if you have worked for many years and are currently about to retire, you probably can count on receiving these benefits as well.
To be eligible for service retirement, you must have at least five years of CalPERS-credited service and be at least age 50, 52, or 55 depending on your retirement formula . If you have a combination of classic and PEPRA service, you may be eligible to retire at age 50 . (See page 12 for more about PEPRA .)
Seeing as your application could take six weeks or more to process, it's in your best interest to file for your benefits the full four months before you're eligible to receive them.
Many deserving claims for Social Security benefits are initially denied, only for a claimant to receive benefits after an appeal. The appeals process involves several possible steps. First, the claimant can file a request for reconsideration.
In most cases, you'll receive your first check in the first part of the month after you have retired. For example, if your retirement date were September 4, your first check would be paid to you in the first week of October.
The safe withdrawal rule is a classic in retirement planning. It maintains that you can live comfortably on your retirement savings if you withdraw 3% to 4% of the balance you had at retirement each year, adjusted for inflation.
The $1,000 per month rule is designed to help you estimate the amount of savings required to generate a steady monthly income during retirement. According to this rule, for every $240,000 you save, you can withdraw $1,000 per month if you stick to a 5% annual withdrawal rate.
Companies that fail a non-discrimination test have a set amount of time to fix any failures of the NDTs. If failures are not corrected in a timely manner, retirement plans may face potential disqualification of the plan.
An employer can't force employees to retire in California just because they're over 40. Likewise, putting a mandatory retirement clause in their retirement plan, contract, pension plan, or any other agreement is also illegal.
A number of situations could put your pension at risk, including underfunding, mismanagement, bankruptcy, and legal exemptions. Laws exist to protect you in such circumstances, but some laws provide better protection than others.
Company and union retirement plans are voluntary. This means that employers are not required to provide a plan.
Some older workers have to continue working because they have inadequate retirement savings. Other people enjoy working for extra income, social interaction or personal fulfillment. Older workers may transition to jobs that allow them to stay engaged and try new activities.
So, if you've only worked 20 years, which is 10 more than the minimum required to collect Social Security, the Social Security Administration will add your salaries from those 20 years and then divide by 35.
If you were born in 1957 or earlier, you're already eligible for your full Social Security benefit. The full retirement age is 66 if you were born from 1943 to 1954. The full retirement age increases gradually if you were born from 1955 to 1960 until it reaches 67.
The ideal monthly retirement income for a couple differs for everyone. It depends on your personal preferences, past accomplishments, and retirement plans. Some valuable perspective can be found in the 2022 US Census Bureau's median income for couples 65 and over: $76,490 annually or about $6,374 monthly.
Rule of thumb: "Save 10% to 15% of your income for retirement." The detail most people miss here is that a 10% to 15% savings rate—which includes any match from your employer—makes sense only if you start saving in your mid-20s or early 30s.
One frequently used rule of thumb for retirement spending is known as the 4% rule. It's relatively simple: You add up all of your investments, and withdraw 4% of that total during your first year of retirement. In subsequent years, you adjust the dollar amount you withdraw to account for inflation.
Social Security payments are reduced if you claim before your full retirement age, while delaying until age 70 increases your monthly benefit. In 2024, the average Social Security benefit is $1,862 per month, while the maximum for those retiring at full retirement age is $3,822.
You have to have at least the equivalent of 10 working years contributing to Social Security to get the retirement benefits. Or have been married to someone who did so. Otherwise, you don't automatically qualify for it.
Financial Planning
Review your retirement accounts, social security, pension, etc. and get the most up-to-date projections. Test your plan! Create a retirement budget and, for a couple of months, practice living within this budget.