Saving for retirement: Changes you can expect to see this year

retirement planning
Posted at 5:22 PM, Jan 20, 2023
and last updated 2023-01-20 18:21:15-05

SOUTHFIELD, Mich. (WXYZ) — Retirement is something many in the workforce look toward one day, but it can be a daunting task to plan for, especially as things changes year to year.

Some changes taking effect this year could mean more money in your pocket. This year, retirees can expect changes to Medicare, social security and when you can start taking money from your individual retirement account.

Retirement is in full swing for Elaine Mclain.

"My concept of retiring is that you never really retire," Mclain said.

And it’s not the first time she’s left the workforce.

"I graduated from Seaholm High School, which is right around the corner, and I went to Mercy College of Detroit. I’m a psychiatric nurse for children and adolescents. I did that from a very young age. I went on to do some business consulting on medical legal and then I actually retired the first time to raise my family," Mclain said.

She says while she was able to plan for her future, she knows it’s an ever-changing landscape for many as changes come each year.

"I have friends who are widows that are really struggling with what comes next or small single families or entrepreneurs that are not sure what’s going to happen if we have a recession or if inflation continues," she said.

This year, retirees or people nearing retirement age can expect further changes including cuts to Medicare costs and an increase to social security. Plus, the age you have to start taking money from your IRA accounts is also being pushed back.

"It means that they’re going to have an opportunity for their money to potentially continue to grow without having to worry about the taxes on those distributions that they’re going to have to take because it’s really a force spend of your money," Detroit Financial CEO Jimmy Pollack said.

He says while there are many changes every year, it doesn’t necessarily mean you should be scared.

"The general topics that get talked about don’t apply to everybody in the same way. For each of us, those needs are very different," Pollack said.

Pollack says for anyone considering retirement, saving will be king, and the earlier you start, the better.

"One of the things that I hear from young people often is, when I’m making a bit more money, I’m going to start to save. I haven’t made enough to start to save. And the reality is, it doesn’t matter if you’re saving $50 a pay, a month, a quarter, just put it away because the longer money gets to sit and work and grow, the better off we’re going to be financially," Pollack said.

Pollack says his best advice for anyone considering retirement soon is to start by making a realistic budget and consult a professional.