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PREPARING FOR RETIREMENT

Preparing for retirement will take planning on your part. Regardless of how you decide to fill your days when you retire, you’ll want to be financially comfortable. This section is designed to give you an idea of how much money you may need during retirement and how to save for a comfortable retirement. To maintain your current standard of living during retirement, experts say you will need between 70% and 80% of your preretirement income during each year of your retirement. If you plan to engage in more expensive pursuits like traveling, you may need more.

Example:
Joe is planning to retire soon and currently earns $35,000 a year.  He will need about $26,250 a year (75% of $35,000) to maintain his current lifestyle after he ritires. 

Three sources—your pension, savings, and Social Security benefits—should combine to meet your living expenses during your retirement. Understanding how these sources work can help you plan for a financially secure retirement and achieve a comfortable retirement lifestyle.

Please note that the Fund Office will provide you with an annual benefit statement, which may be useful in helping you plan for retirement. You will be sent your annual benefit statement based on the last number of your Social Security Number, as follows:

Pension Benefit Estimate

You will receive an estimate of your pension benefits from the Laborers Pension Fund each year in the form of an annual benefit statement.  You should check the record of your hours to be sure it is correct so that you receive the correct pension benefit in the future. 

If your Social Security Number ends in:

You will receive your annual benefit statement in:

1

January

2

February

3

March

4

April

5

May

6

June

7

July

8

August

9

September

0

October

 

The Fund Office can provide you with a calculation of your benefits under all the available payment options. You should request this Good Faith Estimate when you reach retirement age to help you prepare for your retirement.

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Your Social Security Benefit

There are a few facts about Social Security benefits that you should keep in mind.

The government has gradually increased the “full retirement age” for people born after 1937. “Full retirement age” is the age at which you can collect full retirement benefits from Social Security without any reduction for early retirement. For example, if you were born in 1960 or later, full Social Security benefits will be payable to you at age 67—not age 65. So, if you are planning to retire before your “full retirement age,” you will receive a reduced Social Security benefit (unless you wait to receive Social Security). In addition, no retirement benefits are available from Social Security before age 62.

Social Security Full Retirement Age

Social Security's full retirement age is the age at which you can collect full retirement benefits from Social Security, without any reduction for early retirement. 

Year of Birth

Social Security Full Retirement Age

1937 or earlier

65

1938

65 + 2 months

1939

65 + 4 months

1940

65 + 6 months

1941

65 + 8 months

1942

65 + 8 months

1943-1954

66

1955

66 + 2 months

1956

66 + 4 months

1957

66 + 6 months

1958

66 + 8 months

1959

66 + 10 months

1960 or later

67

The Social Security Administration has also developed retirement planning aids that you can find at their web site www.ssa.gov.

Social Security replaces a higher percentage of income for retiring participants at lower pay levels. If you retire with annual earnings of $35,000, you can expect Social Security to replace approximately 33% of your pre-retirement income. To reach the 70% to 80% income replacement levels, you will need help from your pension benefits and personal savings.

 

Social Security Benefits Estimate

You will receive an estimate of your Social Security benefits from the Social Security Administration each year.  You should check the record of your earnings to be sure it is correct so that you receive the correct Social Security benefits in the future. 

Social Security benefits will not change your pension benefits. Your pension from this Plan is in addition to any benefits you or your spouse may receive from Social Security.

 

Your Personal Savings

Once you have estimated the amount of income your pension and Social Security benefits will provide for you in retirement, you can plan your personal savings to meet the balance of your retirement needs.

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