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Ask Fidelity

We know saving for retirement is a top priority for many investors. No matter where you are in the planning process, you may have questions. We can help. Check out the questions we've already answered, or if you're a Fidelity customer, submit your own. We'll post replies to selected questions on a weekly basis.

Ken and Sarah answer your questions

ask-fidelity-retirement-team

For more than 60 years, through all kinds of market conditions, Fidelity has been helping people like you pursue their financial goals. Ken Hevert and Sarah Walsh, who lead our Ask Fidelity team, have spent decades helping investors understand retirement strategies. They can help put Fidelity’s expertise to work for you.

Learn more about Ken and Sarah.

(641 Questions : 640 Answers)

Q&A for Answers to Customer Retirement Questions Category

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Withdrawals and Required Distributions (MRD)
 
1 answer

Can I withdraw the money without penalty if I am 61

Q: 
I want to withdraw some money to pay for the college fee for my kids. Please advise how to withdraw the money.
Thanks
Age: 55 to 64
3 weeks, 1 day ago
by
 - San Mateo, CA
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A: 
Thank you for your question. Yes, since you are older than 59½, you are no longer subject to a 10% early withdrawal penalty on withdrawals from your Traditional IRA. You may, however, be subject to income taxes on those withdrawals. You should talk to your tax advisor about your specific situation.
To withdraw from your Traditional IRA online, log in to NetBenefits® and under the IRA you want to withdraw from, select the option to Withdraw from IRA and follow the steps.

If you prefer, you can submit a paper form. Go to Customer Service (the link is right next to the Fidelity logo in the upper left). Choose FORMS under More Resources, and then choose Most Popular Forms, Withdrawals. You will see the option to download a PDF. Here is a link directly to the PDF: https://www.fidelity.com/bin-public...

Before you withdraw money from your IRA to pay for college expenses, consider the fact that your children have more years to pay off college loans than you do to save for retirement. There are a number of low-interest Federal loan options available for students. Once you have withdrawn money from your IRA, you can only replace it through normal contributions that are subject to annual limits. It may take you a long time to rebuild those savings. Again, you may want to discuss this with an advisor before making a final decision.

I hope this is helpful.

Ken
1 week, 4 days ago
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0
Q: 
I am 61, husband is 64, both retired.

We used the online retirement calculation tool, our combined assets will take us comfortably through the "plan to the ages" of 94 and 92 respectively.

When is the best time to begin taking social security;
* as soon as possible for both husband/wife
* husband at 66 FRA, wife 62 before FRA
* husband 66 FRA, wife 66 FRA
* husband 70, spousal benefit wife at 66, then wife take at 70
* other

Waiting has a breakeven point of "lost" income.

Thank you for your assistance.
Age: 55 to 64
3 weeks, 1 day ago
by
 - Seattle, WA, USA
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A: 
Thank you for your question about when to begin taking Social Security benefits. For most people, Social Security is an important part of their retirement portfolio. When to take Social Security is a big decision and we’re glad to discuss what one should consider when making that election. We also have consultants who can review your plan with you, and information from Social Security to provide a more detailed strategy.

There are some general factors to consider when making the choice, such as one’s age, savings, Primary Insurance Amount (PIA) at Full Retirement Age (FRA) for both spouses, and health or life expectancy for each person. If one can wait on taking their benefit till they reach Full Retirement Age then more strategies will be available such as Claim Now, Claim More Later, and File and Suspend, which will allow one or both of your benefits to earn Delayed Retirement Credits. These credits will increase your benefit by a certain percentage from the time you reach FRA until you start receiving your benefits, or at age 70.

If longevity is in your family history, generally speaking, it is better to delay taking Social Security as long as possible since the benefit payment will increase by an average of 8% a year up to age 70. It’s true that there is a breakeven point, as you mentioned, and if one should pass away prior to that age, then they would have received more had they started their benefits early. But we don’t necessarily know what the future holds, and each client’s situation is unique.

I would suggest the two Fidelity Viewpoints® articles below as a starting point. These articles both provide pros and cons of taking benefits early or later, as well as some strategies for couples to get the most from their Social Security benefits. I also suggest working with one of our consultants who can run an analysis with you and discuss a strategy that is specific to your PIA, age, and longevity assumptions. This will then provide a more detailed plan along with a breakeven point and estimated cumulative lifetime income one could expect from that strategy.

https://www.fidelity.com/viewpoints...

https://www.fidelity.com/viewpoints...

Ken
1 week, 4 days ago
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Age: 55 to 64
3 weeks, 5 days ago
by
 - Braintree, MA, USA
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A: 
Thank you for your question on how Social Security benefits are taxed. A quick way to find out if any of your benefits may be taxable is to add one-half of your Social Security benefits to all your other income, including any tax-exempt interest.

If you file an “individual” return and your combined income from the sources mentioned above is below $25,000, none of your Social Security is taxed. If it is between $25,000 and $34,000, you may have to pay income tax on up to 50% of your benefits, and if it’s over $34,000, then up to 85% of your benefits may be taxable.

If you file a “joint” return and your combined income is below $32,000, none of your Social Security is taxed. If it is between $32,000 and $44,000 then up to 50% may be taxed, and if it’s over $44,000, then up to 85% of your benefits may be taxable.

The maximum Federal income tax on Social Security benefits is 85%, no matter how much other income you have. If you have substantial income from other sources, it might make sense to delay taking Social Security benefits until age 70. The delayed credits, which would result in a higher benefit, would help offset the taxes you might need to pay. As always, we recommend consulting with your tax advisor on your specific situation.

Ken

Important Additional Information:
Fidelity does not provide legal or tax advice. The information herein is general and educational in nature and should not be considered legal or tax advice. Tax laws and regulations are complex and subject to change, which can materially impact investment results. Fidelity cannot guarantee that the information herein is accurate, complete, or timely. Fidelity makes no warranties with regard to such information or results obtained by its use, and disclaims any liability arising out of your use of, or any tax position taken in reliance on, such information. Consult an attorney or tax professional regarding your specific situation.
4 days ago
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Q: 
I plan to get my SS benefits when I reach my full retirement age of 66 because I believe the SS payments to me will not be taxable even though I continue to work full-time earning about $60,000 per year for a few years. Is this belief correct?
Age: 55 to 64
3 weeks, 5 days ago
by
 - Braintree, MA, USA
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Answers

A: 
Thank you for your question on how Social Security benefits are taxed. A quick way to find out if any of your benefits may be taxable is to add one-half of your Social Security benefits to all your other income, including any tax-exempt interest.

If you file an “individual” return and your combined income from the sources mentioned above is below $25,000, none of your Social Security is taxed. If it is between $25,000 and $34,000, you may have to pay income tax on up to 50% of your benefits, and if it’s over $34,000, then up to 85% of your benefits may be taxable.

If you file a “joint” return and your combined income is below $32,000, none of your Social Security is taxed. If it is between $32,000 and $44,000 then up to 50% may be taxed, and if it’s over $44,000, then up to 85% of your benefits may be taxable.

The maximum Federal income tax on Social Security benefits is 85%, no matter how much other income you have. If you have substantial income from other sources, it might make sense to delay taking Social Security benefits until age 70. The delayed credits, which would result in a higher benefit, would help offset the taxes you might need to pay. As always, we recommend consulting with your tax advisor on your specific situation.

Ken

Important Additional Information:

Fidelity does not provide legal or tax advice. The information herein is general and educational in nature and should not be considered legal or tax advice. Tax laws and regulations are complex and subject to change, which can materially impact investment results. Fidelity cannot guarantee that the information herein is accurate, complete, or timely. Fidelity makes no warranties with regard to such information or results obtained by its use, and disclaims any liability arising out of your use of, or any tax position taken in reliance on, such information. Consult an attorney or tax professional regarding your specific situation.
2 weeks, 3 days ago
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0
Retirement Investing
 
1 answer

Social Security maximum benefit at 70

by
 - New York, NY, USA
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Q: 
Does the maximum benefit at 70 ASSUME you continue to work full time/full salary from FRA to 70 or is it based on retiring at FRA (for me 66) and waiting to 70 to apply?.
Age: 55 to 64
4 weeks ago
by
 - New York, NY, USA
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A: 
Thank you for the question. For most people, Social Security benefits will be an integral part of a retirement income plan, and the decision about when to begin collecting benefits is a crucial one.

The amounts provided on your Social Security statement assume that you’ll continue working. The statement provides you with three benefit estimates based on working until age 62, full retirement age (FRA), which is 66 for those born between 1943 and 1954, or age 70. The benefit estimate at age 70 also includes delayed retirement credits. These credits will increase your benefit by a certain percentage from the time you reach full retirement age until you start receiving your benefits, or at age 70. The percentage varies depending on your year of birth; those born in 1943 or later will receive an 8% a year increase to their benefit. At age 70, benefits no longer increase.

The Social Security website offers a lot of additional information on how to estimate your benefits, and the effect of early or delayed retirement. Go to www.socialsecurity.gov and select Retirement Estimator.
I hope this is helpful!

Ken
2 weeks, 3 days ago
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