You've almost made it! The finish line is clearly within sight! As your excitement grows surrounding your upcoming retirement, make sure you've reviewed these "to do" items to help you stay on track to reach your retirement goals!
Record important dates and deadlines. Mark your calendar with any application or election deadlines. Remember, it often takes much longer than you think to prepare and process retirement-related paperwork. To streamline the process, gather all supporting documents, such as last year’s W-2 forms, your birth certificate, social security card, marriage or divorce papers, citizenship or naturalization documents, and military discharge papers. Employers typically allow 30 days to make your pension payout election. Rollovers from employer retirement plans to an IRA can take as long as 90 days.
Contact the Social Security Administration. Apply for social security three months before you wish to receive your first check. The earliest you can apply is at age 61 and 9 months, but you may be better off waiting. Remember that applying for social security before your full retirement age will result in a permanent reduction in benefits. Each year you delay up to age 70 increases your benefit and, if you pass away, that of your widow or widower.
If you plan to work after retirement, be aware that any earnings can reduce or even eliminate your social security benefits before you reach your full retirement age.
Contact your employer. Be sure to understand the process and timeline for starting your retirement benefits; they do not start automatically. Discuss the details with your employer and learn about any decisions you will have to make, including your payout options. Many of these decisions are irrevocable, but we can discuss how the various options will fit into your financial plan.
Contact prior employer retirement plans. Determine how to apply for benefits from former employers. Verify the address and contact information for your past employers’ benefits departments and request a pension estimate, if applicable.
Contact Medicare. When you apply for social security, you will be automatically enrolled in Medicare as soon as you are eligible. Medicare will contact you a few months before your 65th birthday and give you the information you need. If you plan to delay social security, you are still eligible for Medicare at age 65. To avoid a gap in coverage, apply for Medicare three months before your 65th birthday.
If you don’t enroll in Medicare Part B when you are initially eligible, you will have another chance to sign up during the annual general enrollment period from January 1 through March 31. Your coverage will begin the following July. You may incur a 10 percent premium surcharge, however, for each 12-month period you fail to enroll.
If you are 65 or older and are covered under a group health plan, from either your own or your spouse’s current employer, you will have a special enrollment period during which to sign up for Medicare Part B. If you sign up during this time, you will avoid the 10 percent premium surcharge for late enrollment.
Test-drive your retirement budget. New retirees typically find that they’ve underestimated their expenses. Before you retire, test-drive your retirement lifestyle by spending as you would during retirement. Then, determine whether you need to adjust your expectations. If you’ve underestimated your retirement needs, talk to us. Together, we can explore options to increase your retirement resources or reduce your expenses now or in the future.
As a final step, consider depositing enough money to cover two years of expenses into a money market or bank account in anticipation of your retirement.
If you want to review your retirement plan, please reach out to me. We can discuss your specific needs and situation and help ensure you are on track to meet your retirement goals!
Schedule a complimentary consultation: https://calendly.com/taglivingloud/financial-planning