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Retirees want to maximize their social security. Here are some tips.


Noli Cabantug has spent her career going back and forth between the public and private sectors. Now, at 58, he is wondering what his retirement income will be like and what he can do over the next few years to improve it.

Mr. Cabantug, a licensed practical nurse who lives in Pomona, California, teaches public high school students the profession of medicine. With 18 years invested, he is expected to receive about $1,300 a month from the state teachers pension scheme if he retires at 62 and $1,800 a month if he retires at 67 .

He has also been involved in the Social Security industry for decades, working as a nurse in the private sector during school breaks and before becoming a full-time educator. He is now considering whether to work longer as a teacher to increase his pension or return to nursing after he turns 62, depending on how it affects his Social Security. .

Mr. Cabantug says he earns $42 an hour teaching, compared with up to $60 an hour as a nurse, a job that also has the potential for overtime.

Together, Mr. Cabantug and his wife, Marie Cheryl Cabantug, earn about $110,000 a year, and their 25-year-old son Brian lives with them to save money. Ms. Cabantug, 48, is a registered nurse at a family health agency and plans to continue working in the near future. The couple pay about $400 a month for her private health insurance because she prefers using Kaiser Permanente to the health insurance offered through her husband’s job.

The couple has about a $160,000 IRA and $250,000 equity in their home. They have about 20 years left on their mortgage, which has an interest rate of 4.25%. Monthly housing costs up to $2,600 and another $880 for utilities. The family rarely eats out, and they spend about 10% of their income supporting churches in the Philippines.

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They make about $800 a month renting out a room in their home, and they hope to make an additional $1,000 a month from the second rental unit on their property starting next year. . They own a paid vacation home in the Philippines, worth about $40,000, which they rent out most of the time.

Mr. Cabantug said he wanted to learn more about long-term care insurance.

Mr. Cabantug says he enjoys working in both fields. “Teaching is about shaping the character of young and promising people, just as young people need to be inspired,” he said. “Nursing is care through touch.” But if his retirement income is guaranteed, he says he could support the flexibility, diversity and higher pay of nursing for the rest of his working years.

Advice from an expert

William Huston, founder and chief investment officer of Bay Street Capital Holdings in Los Altos, California, said Cabantug is entitled to Social Security because he has worked in the private sector for at least 40 qualifying quarters. full benefits.

Workers like Mr. Cabantug are subject to (with rare exceptions), a provision that reduces the Social Security benefits of retired workers, who also receive retirement benefits based on on income that is not subject to Social Security payroll tax.

Assuming Mr Cabantug starts collecting at age 67, his pension would drop to about $680 a month from the $1,372 he would get if he had no pension.

Mr Huston said Mr Cabantug should consult his pension plan to get a better idea of ​​how it would change if he continued to teach. He said that while he appreciates Mr. Cabantug’s focus on trying to maximize his retirement income, it’s only necessary to earn a higher income as a nurse within a few days. next year is something he shouldn’t overlook.

Mr Cabantug is eligible for timely contributions towards his retirement savings, and the couple should maximize tax-advantaged and tax-free accounts like Traditional and Roth IRAs as well as workplaces. of Mr. Cabantug 403(b), Mr. Huston said.

The couple don’t spend much on luxuries, but Mr Huston suggested they buy less expensive car insurance and investigate their utility budgets in search of more savings.

Long-term care insurance is expensive, but seven in 10 Americans are predicted to need care as they age, Mr. Huston said. He suggested the couple consider a policy with the rider paying the premiums, which provides refunds to heirs if the policyholder dies without exploiting the benefit. He says it’s more expensive, but it offers peace of mind.

Ms. Gallegos is the editor of the Wall Street Journal in New York. Email her at the address demetria.gallegos@wsj.com.

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