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Is Waiting Until Age 70 to Claim Social Security the Right Move for Bank of New York Mellon Retirees?

Healthcare Provider Update: Healthcare Provider for Bank of New York Mellon The primary healthcare provider for Bank of New York Mellon (BNY Mellon) is EmblemHealth, which offers a range of plans catering to the needs of the company's employees. Potential Healthcare Cost Increases in 2026 As we approach 2026, healthcare costs are expected to rise significantly, driven by a combination of factors. Data reveals that many states are facing record premium hikes for Affordable Care Act plans, with some projections showing increases exceeding 60%. The potential expiration of enhanced federal premium subsidies will compound these challenges, resulting in over 22 million ACA marketplace enrollees possibly seeing their out-of-pocket premiums jump by upwards of 75%. This surge in costs is indicative of a broader trend affecting healthcare affordability for many Americans, intensifying pressure on already strained household budgets. Click here to learn more

Bank of New York Mellon employees who choose to defer their Social Security benefits are essentially investing in their future financial security; careful planning with the assistance of seasoned professionals like Wesley Boudreaux from The Retirement Group, a division of Wealth Enhancement Group.

Patrick Ray of The Retirement Group, a division of Wealth Enhancement Group, emphasizes the importance of integrating deferred Social Security with overall retirement strategy for Bank of New York Mellon employees to ensure a comprehensive approach to achieving long-term financial independence.

In this article, we will discuss:

1. The financial benefits and increased monthly payouts of deferring Social Security benefits for Bank of New York Mellon employees, exploring how delaying claims can lead to significant increases in retirement income.
2. The potential drawbacks and necessary considerations when postponing Social Security, including the impact on other retirement assets and tax implications.
3. Strategic planning for retirement , focusing on integrating Social Security with Medicare, market conditions, and personal circumstances to optimize retirement outcomes.
Deciding when to start receiving Social Security benefits is a pivotal choice in the broader scope of retirement planning for Bank of New York Mellon employees. This decision significantly affects an individual's ability to maintain financial freedom throughout their later years. As a benefit that is adjusted for inflation and shielded against the dual retirement risks of inflation and longevity, Social Security forms a crucial element of retirement income.
For Bank of New York Mellon employees looking to sustain their desired lifestyle and financial independence after retiring, it is vital to blend Social Security with other sources of retirement income like pensions and personal savings. Here is a detailed analysis of the benefits and drawbacks of deferring Social Security payments.

Benefits of Postponing Social Security

Deferring Social Security benefits until past the designated maximum retirement age can significantly increase the monthly payout. According to a January 2024 report from the Social Security Administration, delaying benefits until age 70 could lead to an almost 8% annual increase, which translates to about two-thirds of 1% per month. For individuals born before 1955, this could mean receiving up to 132% of the standard monthly pension at full retirement age; those born later might receive slightly less.

Not only does this delay enhance the monthly benefit, but it also raises the base amount used for future cost-of-living adjustments (COLAs). The Social Security Administration applies these increases to a higher base payment annually to help counteract inflation, resulting in more substantial yearly increases.

Another significant advantage for Bank of New York Mellon employees is the potential increase in their spouse's survivor benefits. Should you pass away, your spouse could receive either your enhanced benefits or their own, thus ensuring greater financial freedom.

Possible Consequences of Delaying Social Security

However, delaying Social Security might not suit everyone. It could necessitate the early withdrawal of other retirement assets meant for different purposes, such as inheritance. Moreover, since withdrawals from traditional retirement accounts like 401(k)s could reduce overall retirement income, it's crucial to consider the tax implications.

Taking Health and Emotional Aspects into Account

The decision on when to begin receiving Social Security also heavily depends on individual health and emotional well-being. Some might prefer accessing funds early due to health issues or to assist in a more relaxed and immediate retirement. Balancing financial planning with these emotional factors is critical.

Opportunities and Challenges in the Market

For those considering delays, it's essential to factor in potential future legislative changes to Social Security and market volatility. Selling investments in a bear market to supplement delayed payments could negate the financial benefits of delaying Social Security. Retirement planning should account for possible legislative alterations that could affect future benefits.

Navigating Medicare and Health Insurance

The timing of Social Security is closely linked to health insurance coverage, particularly Medicare. To manage penalties, one must enroll in Medicare within three months of reaching 65. For Bank of New York Mellon employees who delay Social Security past 65, it's crucial to apply for Medicare separately to maintain continuous coverage and manage late enrollment penalties for Part B and Part D.

Choosing Wisely

Making an informed decision about when to claim Social Security requires a thorough evaluation of financial needs, health status, tax implications, other available resources, and overall retirement goals. Claiming early results in permanently reduced payments, and earnings above certain thresholds may incur penalties. This decision is highly personal and requires careful consideration.

In conclusion, delaying Social Security involves weighing immediate needs against long-term security. By carefully analyzing the benefits and potential drawbacks, individuals can make well-informed decisions that can assist in a comfortable and meaningful retirement.

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This strategic approach is akin to planting a tree; while the benefits of delaying Social Security might not be immediate, they significantly enhance financial freedom in later years, much like a tree that grows stronger and provides broader coverage as it matures. This analogy is particularly apt for Bank of New York Mellon employees planning for a stable and prosperous retirement.

Sources:

1. 'Social Security Benefit Deferral: What to Know.' William & Mary Elder and Disability Law Clinic , Oct. 2022, elderlawclinic.pages.wm.edu. Accessed 3 Feb. 2025.

2. Davis, Chris. ''Nearly every retiree should defer Social Security.'' Investment News , 12 Sep. 2024, www.investmentnews.com . Accessed 3 Feb. 2025.

3. Reddick, Chris. 'How to Effectively Save for Retirement in Bank of New York Mellon Companies.' Chris Reddick Financial Planning, LLC , www.chrisreddickfp.com . Accessed 3 Feb. 2025.

4. Nuss, Ken. 'Annuities Can Help You Retire Early, Delay Social Security.' Kiplinger , www.kiplinger.com . Accessed 3 Feb. 2025.

5. Brandt, Benjamin. 'Strategic Retirement Planning for Bank of New York Mellon Employees.' Forbes , www.forbes.com . Accessed 3 Feb. 2025.

What types of retirement savings plans does Bank of New York Mellon offer to its employees?

Bank of New York Mellon offers a 401(k) plan as part of its retirement savings options for employees.

How can I enroll in the 401(k) plan at Bank of New York Mellon?

Employees can enroll in the Bank of New York Mellon 401(k) plan through the company’s benefits portal or by contacting the HR department for assistance.

Does Bank of New York Mellon provide matching contributions to the 401(k) plan?

Yes, Bank of New York Mellon offers a matching contribution to the 401(k) plan, which helps employees boost their retirement savings.

What is the vesting schedule for the Bank of New York Mellon 401(k) matching contributions?

The vesting schedule for Bank of New York Mellon’s matching contributions typically follows a standard schedule, which can be confirmed in the employee handbook or by contacting HR.

Can I change my contribution rate to the 401(k) plan at Bank of New York Mellon?

Yes, employees at Bank of New York Mellon can change their contribution rate to the 401(k) plan at any time, subject to certain guidelines.

What investment options are available in the Bank of New York Mellon 401(k) plan?

The Bank of New York Mellon 401(k) plan offers a variety of investment options, including mutual funds, target-date funds, and other investment vehicles.

How often can I make changes to my investment selections in the Bank of New York Mellon 401(k) plan?

Employees can typically make changes to their investment selections in the Bank of New York Mellon 401(k) plan on a regular basis, often daily or monthly.

Is there a loan provision available in the Bank of New York Mellon 401(k) plan?

Yes, Bank of New York Mellon allows employees to take loans against their 401(k) savings, subject to certain conditions and limits.

What happens to my 401(k) account if I leave Bank of New York Mellon?

If you leave Bank of New York Mellon, you have several options for your 401(k) account, including rolling it over to an IRA or a new employer’s plan, or cashing it out.

Are there any fees associated with the Bank of New York Mellon 401(k) plan?

Yes, there may be fees associated with the Bank of New York Mellon 401(k) plan, which can include administrative fees and investment-related fees. Employees can review the fee structure in the plan documents.

With the current political climate we are in it is important to keep up with current news and remain knowledgeable about your benefits.

Bank of New York Mellon has announced a significant reduction in its workforce, with layoffs expected to affect around 5% of its employees by the end of 2024.

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For more information you can reach the plan administrator for Bank of New York Mellon at 240 Greenwich St New York, NY 10286; or by calling them at +1 212-495-1784.