5 things you may not know about retirement

Planning for your retirement seems simple enough: Max out your 401(k), age gracefully, then retire to sunny Florida and enjoy your grandkids. But as it turns out, there's much more to it.

Here are five surprising things you may not know about retirement.

1. It's never too late to save

It's important to start saving for retirement early because yearly contributions to IRAs and 401(k) plans are limited. But at age 50, you're eligible for "catch-up contributions," which can help boost your retirement savings by allowing you to save additional funds each year. So even if you weren't able to take full advantage of the compounding interest that makes saving early so important and valuable, you can still save a comfortable amount.

2. A little patience can pay off

To receive full Social Security retirement benefits, you have to reach full retirement age (FTR), which is currently 66 for those born between 1943-1954 and will rise to 67 for those born after 1960. But if you wait to retire until the FTR, you'll receive delayed retirement credits, which increase your benefits 8.0% for each year they accrue. So, currently if you were born between 1943-1954 and wait three additional years to retire, your retirements benefits would be 24% higher than if you had retired at 66.

3. You'll probably enjoy a (very) long retirement

Americans are living longer, with an estimated one out of every four 65-year-olds living past age 90 today, according to the Social Security Administration. If you retire at 67 and live to 91, that's 24 years of income you'll need to provide for yourself. While some costs will decrease (commuting, work attire, income taxes), your retirement funds may need to stretch over multiple decades and compensate for factors like inflation and increased healthcare costs. Estimating your retirement expenses with an eye toward longevity planning can help guide your investment decisions.

4. You'll probably be taking care of a parent and yourself

Living longer means more time to spend with loved ones, but retirees are increasingly finding themselves as the primary caregivers for their elderly parents. The average primary caregiver is currently in their 50s, works full-time, and spends three hours per day caring for a loved one, but the National Alliance for Caregiving notes that 20% are now 65 and above. Aging often means increased health-related expenses, and in some cases long-term care needs. So, you may want to consider long-term care benefits because they can provide protection for your retirement income.

5. Retirement improves your outlook

Retirement improves both happiness and health, according to a recent study by The National Bureau of Economic Research. Though the importance of planning for retirement can't be denied, and even if you still have decisions to make, it's good to know that most retirees report being happy and healthy.

Find out more about how to plan for your retirement.

This post is sponsored by Lincoln Financial Group.

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