Take Early Retirement Plan

This article discusses take early retirement plan. What are the benefits of early retirement? Collecting Social Security early can payoff. Even though benefits are reduced, they'll usually add up to more in the long run. Example: If full benefits are $750 per month for retiring at age 65, you can get reduced benefits of $600 a month by retiring at age 62. You'd have to collect full benefits for 12 years to make up the $21,600 you'd receive during the three years of early payments.

Now we will discuss Retirement Planning For Inflationary Times. With high inflation rates, the purchasing power of a dollar can be sliced in half in less than 10 years. Ways out: After retirement, find a job that matches your personal strengths and interests. Example: A retired insurance executive works for an auction house cataloging objects of art. Trick: He loves visiting museums as a hobby. Thus, he turns his leisure-time activity into rewarding work. See early retirement for more information.

To Take Early Retirement Plan - Top

Payday your house sale into an annuity.
How: After the age of 55, your first $125,000 profit from a house sale is tax-free. Buy a smaller home and invest the profit in a steady interest-bearing security.
Alternative: Refinance your home and invest the money in rental property. Why:
Good tax breaks; deductions for depreciation, operating costs, and interest on the mortgage. Bonus: You can increase rents to keep pace with inflation.

Problem With Lump-Sum Distribution: John Grants resigned as an employee of the Wood Clinic to set up his own business. He took a lump-sum payment of all his retirement plan benefits and figured the resulting tax using special lO-year averaging rules. Mistake: To make extra money. John continued to work for the clinic part time as an independent contractor. Tax Court: John was not entitled to take a lump-sum distribution or to use lO-year averaging because he hadn't separated from service with Knollwood. He still worked for the clinic even though he wasn't an employee. The money he took out of the plan was fully taxable at normal rates.

Source: Consumer Information Center

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