Did you take Social Security early? Did you look at all of the Social Security options available to you? Did you think that inflation would remain low, or not have an impact on your retirement? Did you think you would live a shorter life? These are all factors that are too optimistic, in one direction or the other, and detrimental to your retirement. Many retirees spend a lot in the early years of retirement believing that some of the points I have just listed would not apply to them. Through planning we can estimate inflation, we look at life expectancies, and all of the Social Security options available. Generally, we err on the side of caution. If we are wrong, it falls in our clients’ favor. The question becomes as simple as did you fail to plan.

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Fewer than 10% of private employers offer insurance to retirees, though we all are eligible for Medicare at age 65. If you are offered health insurance as a retirement benefit – grab it! Having health insurance through a group, even as a retiree, is always less expensive than as an individual. But health insurance isn’t the only issue.

Many employees have life insurance as a benefit, generally at least one time your salary. Often, as a retiree, you can take this coverage with you but you will now have to pay the annual premium out of pocket. If you still have a mortgage or kids in college you may want to continue this life insurance.

Long term care insurance you had as a benefit is also one that you can take with you. Again, you will have to pay the premiums yourself but this expense is well worth it.

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You are ready to walk out of the corporate door, have the retirement party, say good-bye to your co-workers. Are you also ready to say good-bye to your benefits?

Over the next few blogs, I will give you tips on how to plan your exit. Today, we will look at squeezing out those last few dollars. It is all in the timing.

When does your company credit the employees with the 401k match? Most companies have a regular time table to matching 401k contributions. Look at your last few pay stubs to see when that deposit is made. This is “free money” that you don’t want to leave on the table. Another monetary perk to pay attention to is profit-sharing. Most companies make this contribution once a year, generally at the same time each year. If you do not know when your company doles out the profit sharing, ask your H.R. department.

Lastly, make sure you know the rules for cashing out your unused paid leave and sick time. Does your company have a “use it or lose it’ policy, or can you bank the unused time and have it paid out in a lump sum?

Check these things out before you plan the retirement party. Next, I will discuss your retirement insurance benefits.

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This week’s “Must Read”: 8 Social Security Myths Exposed

Workshops:
Countdown to Retirement Saturday, November 3, 2012 – 11:00am – 1:00pm
Social Security: Maximize Your Benefits Thursday, January 24, 2013 – 6:45pm – 8:00pm

Topic:
Non-Spouse IRAs: Mistakes to Avoid

Planning Issues for 2013

What is the “Retirement Planning Process?”

When I started in business almost 30 years ago, we always talked about the “three-legged stool”. It consisted of a pensions, social security, and personal savings. The pension leg, for most of us, has been chopped away. Personal savings has taken its place and that leg, now supporting two parts of the stool, is more important than ever; add to that the fact that we are all living longer. We must own our retirement and start saving with our very first paycheck. If we can get used to the idea of “paying ourselves first”, even if it is only $10/month with that first job, savings will become second nature.

Social Security being the third leg has been pushed to its limits. There are more people drawing and less people contributing. We know there will have to be changes; in what form is anyone’s guess. For those of you at or near retirement, there will be no changes. For those just entering the workforce, no one knows how Social Security will look when they reach retirement age. This is where personal responsibility comes in.

Savings for retirement today is available in many different forms such as 401k, traditional IRA, or Roth IRA accounts. Many retirement accounts will accept contributions as low as $100/month; which is equivalent to one premium coffee a day. So take responsibility and own your retirement. You will be happy that you did.