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At age 67, the writer of the letter to MarketWatch has not yet taken their Social Security benefits and is still working. They received a $30,000 raise in July 2023 and are trying to save for retirement. With the new salary, they can afford to put more money into their government savings plan, but they acknowledge that they will never be able to catch up on all the years they couldn’t contribute. They will receive a pension from their government agency as well.

The writer is considering taking their Social Security benefits now to pay bills and using the extra money from their paycheck to contribute to their government savings plan. They currently have $25,000 in their savings plan and are allowed to contribute up to $30,000 per year as a pretax catch-up contribution. The writer does not have a financial adviser as they believe their total investment amount is too low for advisors to take on, but they are looking for recommendations to optimize their retirement savings strategy.

MarketWatch advises the writer that they are in a good position to continue saving for retirement and should not give up on their goals. Since the writer is past Full Retirement Age, they will receive more than 100% of their Social Security benefits. However, if they are still working, their benefits may be subject to taxes based on their combined income. MarketWatch emphasizes the importance of considering the tax implications before claiming Social Security while still working.

The writer’s $30,000 raise allows them the opportunity to contribute more to their retirement plan without feeling a significant impact on their daily expenses. MarketWatch suggests contributing as much as possible without jeopardizing their financial stability. Additionally, the writer’s pension is a valuable asset, as pensions are becoming less common in the private sector. By delaying Social Security benefits until age 70, the writer can increase their benefits by up to 8% per year, which can help with future expenses and reduce current tax liabilities.

MarketWatch commends the writer for actively planning for their retirement and adjusting their strategies to align with their current circumstances. They note that many factors, such as the cost of living, family expenses, and emergencies, can hinder retirement savings. The writer’s diligence in managing their finances and seeking advice puts them in a favorable position to optimize their retirement savings and ensure financial security in their later years. It is essential for the writer to continue reviewing and adjusting their financial plans to meet their retirement goals effectively.

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