Get answers to common retirement questions

◼️How much do I need to save for retirement?

A simple rule of thumb is to save about 25 times the amount you’ll need to withdraw from your retirement portfolio during your first year of retirement.

The 25 times rule can give you an idea of where you stand, but it also makes assumptions that might not be true for you. For example, it assumes you’ll be retired for 30 years, spend the same amount every year, and never change your asset allocation. It also assumes you’ll have your portfolio through the end of your retirement.

For a more accurate picture of where you stand, use our retirement savings calculator.

◼️Should I pay off student loans before I save for retirement?

In most cases, the answer is no. While you should stay current on your loan payments, it’s also important to start saving for retirement as soon as you can.

Here’s how we recommend prioritizing debt and retirement savings: 

1. First, make the minimum payments on your student loans and other debt.

2. If there’s money left over, contribute enough to your 401(k) to get the full company match.

3. If you don’t have a 401(k) or other employer-sponsored retirement plan, consider opening a traditional or Roth IRA.

4. If you can, make extra payments on your highest-interest loan to reduce it faster.

5. When you get extra money from a gift, work bonus or tax refund, use it to reduce your debt and save for retirement.

◼️When should I start taking Social Security?

You can start taking Social Security as early as age 62. But you’ll receive a smaller check each month than you will if you wait until your full retirement age. If you wait until after your full retirement age, your Social Security benefit will increase by about 8% for every year you delay, up to age 70. After age 70, there’s no increase for delaying further.

Learn more about when to take Social Security retirement benefits.

◼️Can I change my mind after starting Social Security benefits?

If you take benefits but decide you no longer need them, you can pay back the money you received and restart your benefits later at a higher amount. But you can only do this once, and you must withdraw your application within the first 11 months after you file. 

You'll also have to pay back any taxes or Medicare premiums that were withheld. For more information, visit the Social Security Administration website at www.ssa.gov. 

◼️I'm almost 70½—which retirement accounts have required minimum distributions (RMDs)?

Starting at age 70½ (or age 72, if you turn 70½ after 2019), the IRS requires you to take required minimum distributions (RMDs) from your:

• Employer-sponsored retirement plans—including profit-sharing, 401(k), 403(b), and 457(b) plans

• Traditional, rollover, and (in some cases) inherited IRAs—but not Roth IRAs-1

• SIMPLE IRA

• SEP or SARSEP

• Roth 401(k)—unless you roll it over to a Roth IRA

To avoid the 50% IRS penalty, you must take your RMDs by the deadline. If you turned 70½ in 2019, take your first RMD by April 1 of 2020—and another RMD by December 31, 2020. If you turn 70½ after 2019, take your first RMD by April 1 of the year after you turn 72. Any portion of the required amount that you don’t withdraw by the deadline will be subject to the 50% penalty.