Dear Liz: I work for a wonderful company that has a generous profit sharing plan. I am 61 years old and plan on working until I am 65 and eligible for Medicare.
Due to some health issues, I am reducing my hours and this will significantly reduce my income for the next four years. I thought this was a good plan because it keeps my health insurance intact, but now I am wondering if the lower earnings will affect my profit sharing when I retire. I know the final distribution is based on earnings and time on the job. Should I retire now, while my income is up, or should I wait until I am 65?
Answer: There are a lot of moving parts to any decision about retirement. How much will health insurance cost and how will you pay for it? How much do you have saved and how long are those funds likely to last? What’s the best time to apply for Social Security and how will that affect your retirement fund withdrawals? (It’s often best to delay Social Security as long as possible and draw down retirement savings instead, especially if you’re the primary earner, but individual