Your age when you collect Social Security has a big impact on the amount of money you ultimately get from the program. The key age to know is your full retirement age. For people born between 1943 and 1954, full retirement age is 66. It gradually climbs toward 67 if your birthday falls between 1955 and 1959. For those born in 1960 or later, full retirement age is 67. You can collect Social Security as soon as you turn 62, but taking benefits before full retirement age results in a permanent reduction — as much as 25.83% of your benefit if your full retirement age is 66.

Age also comes into play with kids: Minor children of Social Security beneficiaries can be eligible for a benefit. Children up to age 18, or up to age 19 if they are full-time students who haven’t graduated from high school, and disabled children older than 18 may be able to receive up to half of a parent’s Social Security benefit.

To be eligible for Social Security benefits, you must earn at least 40 “credits.” You can earn up to four credits a year, so it takes ten years of work to qualify for Social Security. In 2016, you must earn $1,300 to get one Social Security work credit and $5,200 to get the maximum four credits for the year.

Your benefit is based on the 35 years in which you earned the most money. If you have fewer than 35 years of earnings, each year with no earnings will be factored in at zero. You can increase your benefit by replacing those zero years, say, by working longer, even if it’s just part-time. But don’t worry — no low-earning year will replace a higher-earning year. The benefit isn’t based on 35 consecutive years of work, but the highest-earning 35 years. So if you decide to phase into retirement by going part-time, you won’t affect your benefit at all if you have 35 years of higher earnings. But if you make more money, your benefit will be adjusted upward, even if you are still working while taking your benefit.

There is a maximum benefit amount you can receive, though it depends on the age you retire. For someone at full retirement age in 2016, the maximum monthly benefit is $2,687.

One of the most attractive features of Social Security benefits is that every year the government adjusts the benefit for inflation. Known as a cost-of-living adjustment, or COLA, this inflation protection can help you keep up with rising living expenses during retirement. The COLA, which is automatic, is quite valuable; buying inflation protection on a private annuity can cost a pretty penny.

Because the COLA is calculated based on changes in a federal consumer price index, the size of the COLA depends largely on broad inflation levels determined by the government. For example, in 2009, beneficiaries received a generous COLA of 5.8%. But retirees learned a hard lesson in 2010 and 2011, when prices stagnated as a result of the recession. There was no COLA in either of those years. For 2012, the COLA came back at 3.6%, but dropped to less than 2% in the next few years. Bad news came again last year: Prices were flat, and thus there was no COLA for 2016. But, on the bright side, there will be a 0.3% COLA for 2017.

Marriage brings couples an advantage when it comes to Social Security. Namely, one spouse can take what’s called a spousal benefit, worth up to 50% of the other spouse’s benefit. Put simply, if your benefit is worth $2,000 but your spouse’s is only worth $500, your spouse can switch to a spousal benefit worth $1,000 — bringing in $500 more in income per month.

The calculation changes, however, if benefits are claimed before full retirement age. If you claim your spousal benefit before your full retirement age, you won’t get the full 50%. If you take your own benefit early and then later switch to a spousal benefit, your spousal benefit will still be reduced.
Note that you cannot apply for a spousal benefit until your spouse has applied for his or her own benefit.

If your spouse dies before you, you can take a so-called survivor benefit. If you are at full retirement age, that benefit is worth 100% of what your spouse was receiving at the time of his or her death (or 100% of what your spouse would have been eligible to receive if he or she hadn’t yet taken benefits). A widow or widower can start taking a survivor benefit at age 60, but the benefit will be reduced because it’s taken before full retirement age.

If you remarry before age 60, you cannot get a survivor benefit. But if you remarry after age 60, you may be eligible to receive a survivor benefit based on your former spouse’s earnings record. Eligible children can also receive a survivor benefit, worth up to 75% of the deceased’s benefit.

What if you were married, but your spouse is now an ex-spouse? Just because you’re divorced doesn’t mean you’ve lost the ability to get a benefit based on your former spouse’s earnings record. You can still qualify to receive a benefit based on his or her record if you were married at least ten years, you are 62 or older, and single.

Like a regular spousal benefit, you can get up to 50% of an ex-spouse’s benefit — less if you claim before full retirement age. And the beauty of it is that your ex never needs to know because you apply for the benefit directly through the Social Security Administration. Taking a benefit on your ex’s record has no effect on his or her benefit or the benefit of your ex’s new spouse. And unlike a regular spousal benefit, if your ex qualifies for benefits but has yet to apply, you can still take a benefit on the ex’s record if you have been divorced for at least two years.

Note: Ex-spouses can also take a survivor benefit if their ex has died first, and like any survivor benefit, it will be worth 100% of what the ex-spouse received. If you remarry after age 60, you will still be eligible for the survivor benefit.

Once you hit full retirement age, you can choose to wait to take your benefit. There’s a big bonus to delaying your claim — your benefit will grow by 8% a year up until age 70. Any cost-of-living adjustments will be included, too, so you don’t forgo those by waiting.

While a spousal benefit doesn’t include delayed retirement credits, the survivor benefit does. By waiting to take his benefit, a high-earning husband, for example, can ensure that his low-earning wife will receive a much higher benefit in the event he dies before her. That extra income of up to 32% could make a big difference for a widow whose household is down to one Social Security benefit.

In some cases, a spouse who is delaying his benefit but still wants to bring some Social Security income into the household can restrict his application to a spousal benefit only. To use this strategy, the spouse restricting his or her application must be at full retirement age and he or she must have been born on January 1, 1954, or earlier. So the lower-earning spouse, say the wife, applies for benefits on her own record. The husband then applies for a spousal benefit only, and he receives half of his wife’s benefit while his own benefit continues to grow. When he’s 70, he can switch to his own, higher benefit. Exes at full retirement age who were born on January 1, 1954, or earlier can use the same strategy — they can apply to restrict their application to a spousal benefit and let their own benefit grow.

There aren’t many times in life you can take a mulligan. But Social Security offers you the chance for a do-over. Say you claimed your benefit, but now wish you had waited to take it. Within the first 12 months of claiming benefits, you can “withdraw the application.” You will need to pay back all the benefits you received, including any spousal benefits based on your record. But you can later restart your benefit at a higher amount.

Early claimers have another opportunity for a do-over: They can choose to suspend their benefit at full retirement age. Say you took your benefit at age 62. Once you turn full retirement age, you can suspend your benefit. You don’t have to pay back what you have received, and your benefit will earn delayed retirement credits of 8% a year. Wait to restart your benefit at age 70, and your monthly payment will get up to a 32% boost — which could erase much of the reduction from claiming early.

Most people know that you pay tax into the Social Security Trust Fund, but did you know that you may also have to pay tax on your Social Security benefits once you start receiving them? Benefits lost their tax-free status in 1984, and the income thresholds for triggering tax on benefits haven’t been increased since then.

As a result, it doesn’t take a lot of income for your benefits to be pinched by Uncle Sam. For example, a married couple with a combined income of more than $32,000 may have to pay income tax on up to 50% of their benefits. Higher earners may have to pay income tax on up to 85% of their benefits.

Bringing in too much money can cost you if you take Social Security benefits early while you are still working. With what is commonly known as the earnings test, you will forfeit $1 in benefits for every $2 you make over the earnings limit, which in 2016 is $16,920. Once you are past full retirement age, the earnings test disappears and you can make as much money as you want with no impact on benefits.

But the good news is that any benefits forfeited because earnings exceed the limits are not lost forever. At full retirement age, the Social Security Administration will re-figure your benefits going forward to take into account benefits lost to the test. For example, if you claim benefits at 62 and over the next four years lose one full year of benefits to the earnings test, at a full retirement age of 66 your benefits will be recomputed — and increased — as if you had taken benefits three years early, instead of four. That basically means the lifetime reduction in benefits would be 20% rather than 25%.

A traditional investing rule has been to subtract your age from 100 and use the result as the percentage that stocks should represent in your portfolio. This means that as you approach retirement, you’ll move away from equities and start investing more in bonds, so as to lessen your overall risk. But increasing lifespans mean some of us could spend more than 35 years in retirement, and going too conservative means older investors may outlive their savings.

A more recent guideline is to subtract your age from 110 or 120, but that still may not be appropriate for everyone. The bottom line is if you need to make your money last longer, you’ll need the extra growth potential that continuing to invest in a mix of stocks and bonds can provide. Although that may seem to contradict the apparent logic of not taking risks with your money once you hit a certain age, relying on certificates of deposit, money-market accounts and cash could be far riskier, and may mean your retirement income won’t keep pace with inflation.

For a realistic picture of what you’re able to pay out in your golden years, you need to create a retirement spending budget long before you actually stop working. Creating that budget is a necessity to help you avoid draining your nest egg. Your discretionary spending is one of the biggest factors impacting your retirement income, and it’s all in your hands.

A retirement budget should include needs (rent, food, utilities), wants (cable, cell phone) and wishes (the fun stuff you want to do in retirement, such as travel, hobbies and entertainment). To cover your bases, make sure also to account for the unexpected, such as a struggling relative in need of financial assistance, repairs and maintenance on the big-ticket items you own and medical care for any furry friends you may have.

Having a diversified portfolio with positions in a variety of asset classes is a key investing strategy designed to help smooth out the ups and downs of the markets. That being said, you should always invest according to your specific, individual goals. If you’re looking to build a portfolio that will generate cash, and are more concerned with having enough income than you are with building wealth, you may want to consider adding more fixed-income products such as Fixed or Fixed Indexed Annuities.

Whether you’re finally in countdown mode or still have 20 years until you retire, you deserve to look ahead to retirement, knowing you’ll have the income you need to afford the lifestyle you want. Running out of money is one of the biggest retirement fears, but with a little advance planning, you can develop a strategy to help your hard-earned dollars last a lifetime.

Planning ahead for long-term care is important because there is a good chance you will need some long-term care services if you live beyond the age of 65. About 70 percent of people over age 65 require some services, and the likelihood of needing care increases as you age.

Planning ahead helps you understand what service options are available in your community, what special conditions may apply for receiving services, for example, age or other eligibility criteria, what services cost, and what payment options – public and private – apply. Having this information helps ensure you will have a range of options when you need long-term care, and makes it more likely that you will have more choice and control over where and how you receive services.

Planning ahead is important because the cost of long-term care services often exceeds what the average person can pay from income and other resources. By planning ahead, you may be able to save your assets and income for uses other than long-term care, including preserving the quality of life for your spouse or other loved ones. With planning, there is a greater likelihood of being able to leave an estate to your heirs, because you are less likely to use up your financial resources paying for care.

Planning ahead also means less emotional and financial stress on you and your family. It can provide a way to involve your family in decisions without depending on them to bear the entire burden alone.
Finally, for many people, one of the most important advantages of planning ahead is to ensure greater independence should you need care. Your choices for receiving care outside of a facility and being able to stay at home or receive services in the community for as long as possible are greater if you have planned ahead.

There are many reasons why people don’t plan ahead for long-term care. These include the natural tendency to avoid thinking about becoming dependent on others for your care, misinformation about the risks of needing care, and lack of knowledge about the cost of care and payment options.

Most people don’t like to think about getting older, developing a disability, becoming less independent, or needing help with personal care. Many people don’t realize that their chance of needing long-term care by the time they turn 65 is as high as 70 percent.

People commonly misunderstand how expensive long-term care is, and how it is paid for. Consumer surveys have shown that many individuals don’t realize that health insurance, Medicare, and/or disability coverage do not pay for most long-term care services. Medicaid pays for some long-term care services, but only if you qualify for the program because you have limited income and financial resources.

Some people find it too difficult to raise these subjects with their loved ones, making it difficult to explore and define their plans. Adult children often feel like they are patronizing their parents if they raise the subject or they are afraid of giving the impression that they might not want to provide care if it is needed. Parents often don’t want to make adult children uncomfortable or to discuss details of their finances with them.

Finally, some people realize it is important to plan, but don’t know how to go about it. The best way to begin is with small and easy steps. Even just talking with your loved ones is a great first-step!

There are a number of possible solutions to the need for long term care for you. Here are some of the most common solutions. To get an estimate of what the cost would be in your area call a Long Term Care specialist to help you with quotes on the plan that is best for you.

1. Self-Insure – This is by far the most expensive way to pay for long term care, out of your pocket. People work their entire lives planning for retirement so they can have the income to live the lifestyle they want. To pay for long term care, you’ll have to spend your income and quickly spend down your assets – your lifestyle will change. Self-insuring is also the way many people spend their life savings only to end up on welfare (Medicaid) if they run out of money.
If you do not have long term care insurance now, you are self-insured, and if your health suddenly changed you may not qualify for insurance and would have to pay yourself.

2. Medicare / Medicare – There are serious limitations when using these as solutions. It is a form of welfare, so you have to be almost destitute to qualify. Medicaid decides where you stay and who takes care of you, thus taking away your independence. You must meet the poverty asset and income requirements and in the end, your estate can be liable for your expenses.

3. Commercial Long-Term Care Insurance – There are a number of reputable companies that offer competitive products for long term care risk. Historically this type of coverage has been considered expensive because people have waited until they were older to protect themselves.

Today, insurance companies are getting better at underwriting the long-term care risk and it is much more affordable that most people think. As with all insurance, you are betting you won’t use it, but the chances are almost certain you’ll need some long-term care. The cost for insurance is pennies on the dollar compared to the cost of care. Usually policies bought in one state are good for coverage in another state in case you move.

4. Asset-based Long Term Care Insurance – This may be a good alternative for people who have a significant asset base and don’t want to pay monthly premiums for something they are not sure they will ever need. It is actually a life insurance policy with an accelerated death benefit that can be used for long term care expenses if you need it. If you are fortunate enough to never use the long term care benefits, your beneficiaries inherit the amount of the policy. And all of it is tax-free. An example would be for age 62, a $100,000 lump sum can provide a monthly LTC benefit of $4,000 up to $250,000 and a death benefit of $150,000.

Medicare doesn’t cover routine physical exams. But when you’re new to Medicare, you’re entitled to a one-time “Welcome to Medicare” exam and medical history review within 12 months of enrolling in Part B. Also, Medicare offers annual wellness checkups. Both are free of charge if provided by a doctor who accepts Medicare reimbursement in full.

Certain lab tests and screenings used to diagnose diseases early are also free of charge. These include mammograms, pap smears, bone density measurement, and screenings for cardiovascular disease, prostate cancer, HIV and diabetes. Although the tests themselves are free, in most cases you still pay the required copay to see the doctor who prescribes them.

Most doctors accept Medicare patients, but some don’t. Be aware that a physician who has opted out of Medicare cannot bill Medicare for treating you, and you will be responsible for the whole cost. It’s also important to find out whether a doctor accepts Medicare “assignment,” which means that he or she has agreed to the Medicare-approved amount as payment in full, or whether the doctor can charge you up to 15 percent above this amount.

Note that the above information applies if you’re in the traditional Medicare program. if you enroll in a Medicare Advantage HMO, you must generally go to doctors who are in the plan’s provider network and service area. Medicare Advantage PPOs also have provider networks but allow you to go out of network for higher copays.

There are many decisions that need to be made when you’re turning 65.

The Initial Enrollment Period (IEP) is the first time you can sign up for Medicare. You may join Medicare Parts A, B, C and D during this time:

• The 3 months before your 65th birthday,
• The month of your birthday, and
• The 3 months after your birthday.

Typically, Medicare doesn’t cover the following:

• Eyeglass and Eye Care
• Dental Care
• Hearing Aids and Exams
• Cosmetic Surgery
• Acupuncture
• Overseas Services
• Long Term Care

Some Medicare Advantage plans to offer limited benefits for Eye exams and glasses, dental care and hearing tests. You would need to shop around for the plans available in your area.