5 Retirement Facts

By Thomas R. Kestler

There are about 76 million baby boomers (Born between 1946 and 1964) in the United States. Today the “boomers” are between 61 and 79 years old, and as they have marched into retirement, they have created an increasing strain on the Social Security trust fund. This is because there are an increasing number of recipients, there are fewer wage earners paying into the system. This is of little concern for those at or near retirement. However, future generations will find that Social Security will be an ever decreasing percentage of the funds needed to retire comfortably.

Most Americans expect Social Security to play at least some role in their retirement. Here are some things to consider about Social Security:

1. Today, the average monthly Social Security payment for retired workers is about $2,000. This will increase in 2026 by a 2.8% cost-of-living adjustment (COLA).

2. Your Social Security payment is influenced by

a. Your earnings history – Higher earnings lead to higher benefits

b. Years worked – Benefits are based on your 35 highest-earning years

c. Age when you claim – Benefits are based on your Full Retirement Age (FRA)

which varies based on your year of birth. You can see your FRA by following this

link (www.ssa.gov/retirement.full-retirement-age).

3. You can claim retirement benefits at age 62 but they will be substantially reduced. For example, if your FRA is 66 and your FRA benefit is $2,000, you’d only receive about $1,400 if you claim at age 62 (a 30% reduction for the rest of your life). On the other hand, for each year you defer claiming past your FRA, your benefit increases by 8% all the way up to age 70. In this example, at age 70, the benefit would be $2,560/month.

4. Personal savings will likely be a major part of any retirement plan. A good rule of thumb is to set aside at least 20% of everything you earn from your first paycheck on. Employer plans like a 401k may also offer a match on your contribution. Sadly 16% of American workers have less than $1,000 in savings.

5. About 29% of retirees work during their retirement – some because they want to, but most because they have to.

One final thought. Over the next 20 years, as the baby boomers age, the greatest transfer of wealth in history will occur. No matter which side of that transfer you are on, are you prepared?

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Tom Kestler has been involved in the financial planning field for over 45 years. He is a graduate of Millersville State University and the College for Financial Planning in Denver, Colorado (for which he has acted as an adjunct instructor) and carries the Certified Financial Planner (CFP) designation.

He has also been awarded the Chartered Life Underwriter (CLU), Chartered Financial Consultant (ChFC) and Chartered Mutual Fund Counselor (CMFC) designations from the American College in Bryn Mawr, PA. He was the founder of Kestler Financial Group, Inc., a firm which specialized in the marketing of financial products and services to over 5,000 independent representatives throughout the United States. Kestler Financial Group was acquired by Highland Capital in 2018.

Mr. Kestler carries Life, Health and Variable Products licenses in several states and provides consulting services to insurance companies on product design and development. He also acts as an expert witness in securities and insurance litigation cases.

Prior to his retirement, Tom served as VP Advanced Sales at Highland Capital, and also CEO of Branch Development Partners, an Office of Supervisory Jurisdiction (OSJ) for Securities America, Inc. (now Osaic), an independent securities broker/dealer.

Tom is teaching our Financial Wellness Course— the next class is scheduled for Monday, January 26th. Sign up today!

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