Phased retirement: Easing into it

However, workers who wait more than a year after they start collecting benefits can't repay the money and restart their benefits later. At full retirement age, they can voluntarily suspend their benefits until as late as age 70 to get delayed retirement credits. Once they resume drawing Social Security, their benefit will be larger than what they had been receiving but lower than the benefits they would have received if they had never started taking benefits in the first place, says Fahlund.

The SSA says it recalculates benefits to credit people for months when they didn't get a benefit while working.

Bottom line: You have plenty of options, but it's best to determine your needs before you begin drawing Social Security in the first place.

Practice retirement by traveling

Along with many planners, Fahlund recommends delaying Social Security to age 70 if possible. She suggests working full time into your 60s and suspending contributions to the 401(k) plan or other retirement fund. Instead, use that money to travel on weekends or do whatever you want to test the retirement waters.

Her rationale: Investing in your 60s won't result in much of a return if you're going to retire soon anyway. The money doesn't have as much impact on your retirement fund as it does in earlier years.

"The trade-off is yes, you'll be working longer, but you were probably going to be working longer anyway," says Fahlund.

Using money in your 60s that would have normally been contributed to a retirement account is a great way to explore retirement and doesn't set a retirement account back as much as you'd think, she says.

That may be true, says Dennis R. Marvin, CFP and owner of Marvin Wealth Management near Cleveland. But contributing to a 401(k) with an employer match is still a great deal that shouldn't be passed up, even at age 60.

"Any time you can put in 60 cents and immediately have $1, that's a good deal," Marvin says.

A better phased retirement approach is to work part time toward the end of your career, cut expenses and see if you can live within a smaller budget, he says. Marvin suggests aiming to replace 70 percent to 80 percent of your full-time working wage in retirement.

Second home?

Jan Jumet, 45, is following his retirement dreams early. He bought a condo in Scottsdale, Ariz., to retire in -- though Jumet and his wife plan to use it until then to get away from the winters at their home in Darlington, Pa. The 1,200-square-foot luxury condo cost them about $500,000 -- half the asking price when compared to 2008, when it was built.

If a luxury condo isn't within your budget as a way to ease into retirement, consider sticking with the advice of delaying Social Security until you're 70.

"You've got to look at this as insurance against poverty and old age, and this is the best way to do it," said Tacchino, 54, who is writing a study on Social Security.


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