JANUARY 2014 ;e Costco Connection 19
you wait until age 70 your benefits will be more than
75 percent higher. That’s a big increase in later-life
income that can make for a much more comfortable
retirement if you anticipate a long life. (Half of
today’s 65-year-olds will still be alive into their 80s
and beyond.) Whether you are 40 or 60 today, take
the time to learn about the power of delaying. I
think once you understand the payoff you will be
motivated to adjust your retirement planning so you
can delay. (Note for married couples: Only the
higher-earning spouse needs to delay to age 70.)
The AARP has a free online calculator at www.aarp.
calculator.html that will walk you through your
potential Social Security benefits based on the age
you start claiming them.
5. Protect your family. I remain amazed by
how many families I speak with that don’t have term
life insurance. Honestly, I don’t get it. If anyone is
dependent on your income, you need life insurance.
It’s really that simple. For the vast majority of families, all they need is term life insurance, rather than
more expensive permanent life insurance. And it is
very affordable. For example, the monthly premium
for a healthy 40-year-old male who takes out a
$500,000 term life policy for 20 years would be less
than $50. That’s a whole lot of peace of mind for a
relatively small sum. You can learn more at www.
6. Live below your means, but within
your needs. When you are about to buy something or borrow a certain amount, find a quiet
place to ask yourself: Do I need to spend (or borrow) this much, or could I meet my needs by buying something less expensive? Whether you are
contemplating buying a new home, a car or a television, or planning a home remodel, spending only
what you need to spend—not what you can
spend—is the key to building financial security this
year, and every year. C
Email your personal-finance questions to
(425) 313-6718; or mail to
“Suze Orman Q&A”
in the subject line; or fax to
Q&A with Suze Orman
The Costco Connection
P.O. Box 34088
Seattle, WA 98124-1088.
Suze will answer
selected questions in
this bimonthly column.
She regrets that
cannot be answered
Suze Orman’s TV
By Suze Orman
show airs Saturday
and Sunday on CNBC. Suze
can be contacted at
FOLLOW MY CHECKLIST of six smart money
moves you can set up today and I promise you that
by the end of 2014 you will have increased your financial security.
1. Pay as you go. Using cash or a debit card
without overdraft protection means you will limit
yourself to spending money you actually have.
That’s smarter than using a credit card and charging
more than you can afford to pay off in full at the end
of the month.
2. Pay yourself first. Set up automated
deposits into a savings account for any goal(s) you
have, such as increasing your emergency fund or
saving up for a car down payment. The deposit
should occur at least once a month. Putting this on
automatic means you can’t talk yourself out of skipping a month. How much to save each month?
That’s up to you. My challenge: Choose an amount.
Write it down. Now add 10 percent more. Have
that amount deposited in your savings account for
at least three months. I bet that if you stand firm
and try this, you will find you can stick with it. If
you use online banking, give your account a name
such as “My Emergency Fund” or “My Car Down
Payment Fund.” Labeling accounts helps you stay
focused on saving for a goal.
3. Boost your retirement savings rate
by one percentage point. Whatever you are
saving today, increase it by at least one percentage
point for next year. Why just one percentage point?
Because there is no way you can tell me with a
straight face that you can’t afford to try this. Then,
in 2015, add another percentage point. And keep at
this until you are saving at least 10 percent of your
income for retirement.
4. Check out the payoff for delaying
your Social Security benefits. You can start
drawing your retirement benefits at age 62, but if
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