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A near-retiree wants to maximize his social security.  Here are a few tips.


Noli Cabantug has spent her career moving back and forth between the public and private sectors. Now, at 58, he wonders what his retirement income will look like and what he can do in the next few years to improve it.

Mr. Cabantug, a licensed practical nurse who lives in Pomona, Calif., teaches public high school students about medical careers. With 18 years invested, he expects to receive about $1,300 a month from a state teachers’ retirement program if he retires at age 62 and $1,800 a month if he retires. at 67 years old.

He also contributed to social security for decades, working as a nurse in the private sector during school holidays and before becoming a full-time educator. Now he is debating whether he should work longer as a teacher to increase his pension, or return to nursing after he turns 62, depending on the impact it will have on his social security.

Mr Cabantug says he earns the equivalent of $42 an hour teaching, compared to up to $60 an hour as a nurse, a job that also offers the option of working 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 with a home care agency and plans to continue working for the foreseeable future. The couple pays around $400 a month for private health insurance for her because she prefers to use Kaiser Permanente, rather than the health insurance provided by her husband’s job.

The couple have about $160,000 in IRAs and $250,000 in equity in their home. They have about 20 years left on their mortgage, which has an interest rate of 4.25%. Monthly housing costs are $2,600 and an additional $880 for utilities. The family rarely eats out and donates around 10% of their income to support churches in the Philippines.

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They make about $800 a month renting a bedroom in their home and they expect to make another $1,000 a month from a second rental unit on their property starting next year. They own a paid vacation home in the Philippines, worth around $40,000, which they mostly rent out.

Mr. Cabantug is interested in learning more about long term care insurance.

Mr. Cabantug says he enjoys working in both fields. “Teaching shapes the character of the young and promising, as well as young adults who need inspiration,” he says. “Nursing is caring through touch.” But if his retirement income is secure, he says he could prioritize the flexibility, variety and higher pay of nursing in his remaining working years.

Advice from a pro

Mr. Cabantug is eligible for Social Security because he worked in the private sector for at least 40 qualifying quarters, said William Huston, founder and chief investment officer of Bay Street Capital Holdings in Los Altos, Calif. But he will not receive his full benefit.

Workers like Mr. Cabantug are subject (with rare exceptions) to the winding-up clause, which reduces social security benefits for retired workers who also receive retirement benefits based on earnings that were not not subject to the Social Security payroll tax.

Assuming Mr. Cabantug starts collecting benefits at age 67, his benefit will be reduced to around $680 a month from the $1,372 he would get if he did not also have the pension.

Mr Huston says Mr Cabantug should consult his pension plan for clarity on how that would change if he continued to teach. He says that while he appreciates Mr. Cabantug’s focus on maximizing his retirement income, just earning more income as a nurse over the next few years is something he should not overlook.

Mr. Cabantug is eligible for catch-up contributions to his retirement savings, and the couple are expected to maximize tax-advantaged, tax-exempt accounts such as traditional and Roth IRAs and Mr. Cabantug’s workplace 403(b) , says Mr. Huston.

The couple don’t spend much on luxuries, but Mr Huston suggests they buy cheaper car insurance and investigate their utility budget to seek more savings.

Long-term care insurance is expensive, Huston says, but seven out of 10 Americans are expected to need care as they age. He suggests the couple consider a policy with a return of premium rider, which provides heirs with a refund in the event of the policyholder’s death without touching benefits. It costs more, he says, but it provides peace of mind.

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

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