Planning for retirement as a private-sector employee requires careful thought and preparation. Your financial security in retirement depends on how well you plan for Social Security, Medicare, taxes, and long-term care. At Preferred Insurance, we help individuals in Ocala, Ocklawaha, The Villages, and surrounding areas navigate these decisions with confidence.
Understanding Social Security and Your Benefits
Social Security is a major source of income for many retirees. Knowing when to claim your benefits can significantly impact your monthly payments. If you start receiving benefits before reaching Full Retirement Age (FRA)—which varies between 66 and 67 depending on your birth year—your payments will be permanently reduced. However, if you delay benefits until age 70, your monthly checks will increase.
Creating an account at SSA.gov allows you to track your earnings, estimate your retirement benefits, and review any credits you have earned.
Self-Employed and Retirement: What You Need to Know NOW
If you are self-employed or a 1099 contractor, your retirement planning may look different from traditional employees. Unlike W-2 workers, you are responsible for managing your own retirement savings and ensuring you earn enough credits to qualify for Social Security benefits.
- Tracking Your Social Security Credits: Many self-employed individuals don’t realize they may not have enough credits to qualify for full Social Security benefits. You can check your earnings and credits by creating an account at SSA.gov. If you haven’t contributed enough through self-employment taxes, your benefits could be significantly lower—or nonexistent.
- Tax Strategies for Self-Employed Retirement Savings: Without an employer-sponsored 401(k), self-employed workers need to set up their own retirement accounts. Options include SEP IRAs, Solo 401(k)s, and traditional or Roth IRAs. Contributing regularly to these accounts can provide long-term financial stability in retirement.
- Planning for Healthcare in Retirement: Self-employed individuals often don’t have access to employer-provided healthcare, making Medicare even more crucial. Be sure to enroll at age 65 to avoid penalties and consider supplementing with a Medigap or Medicare Advantage plan.
Read more about self-employment and Social Security in our blog: How Paying Taxes Might Leave You With $0 in Social Security Income.
Preparing Your 401(k) and IRA for Retirement
Employer-sponsored 401(k) plans and IRAs are common retirement savings tools. To make the most of your retirement savings, consider maximizing your contributions, taking advantage of employer matching, and planning for distributions wisely. If you are nearing retirement, you may want to roll over your 401(k) into an IRA or annuity to secure a stable income. Roth IRA conversions are another option for reducing future tax liabilities by allowing for tax-free withdrawals in retirement.
Medicare: What You Need to Know
Health insurance is a crucial part of retirement planning. Medicare enrollment begins at age 65, and failing to enroll on time can result in penalties and delays in coverage. By creating an account at Medicare.gov, you can keep track of your benefits and explore additional coverage options such as Medicare Supplement (Medigap) or Medicare Advantage plans. If you’re selling a home as part of your retirement plan, be mindful that large lump-sum transactions can impact your Medicare premiums due to Income-Related Monthly Adjustment Amount (IRMAA) charges. Learn more in our blog: Turning 65 & Selling a Home? How It Affects Medicare Costs in The Villages.
Managing Taxes in Retirement
Many retirees overlook how taxes will affect their income. Withdrawals from traditional 401(k)s and IRAs are taxable, and required minimum distributions (RMDs) begin at age 73. Selling assets or taking large distributions can push you into a higher tax bracket and increase your Medicare premiums. A strategic withdrawal plan can help minimize these tax implications and keep more of your money working for you.
Long-Term Care and Life Insurance
As people live longer, the need for long-term care planning has become more important. Long-term care insurance can help cover nursing home or in-home care expenses, preventing you from depleting your retirement savings. Additionally, reviewing your life insurance policies ensures that your estate and loved ones are financially protected.
Why Work with Preferred Insurance?
Planning for retirement can be complex, but you don’t have to navigate it alone. Our local expertise in Ocala, The Villages, Ocklawaha, and Belleview allows us to provide personalized guidance based on Florida’s unique retirement landscape. From Medicare and annuities to tax-efficient strategies, we ensure your financial future is secure.
Get Started on Your Retirement Plan Today
Retirement should be a time of enjoyment, not stress. Contact Preferred Insurance to schedule a consultation and create a strategy tailored to your needs.
Call us at 844-329-1444 or visit our office in Ocklawaha, FL. We proudly serve Ocala, The Villages, Belleview, Leesburg, and all of Central Florida.
