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Retirement Are you retiring in 5 years or less? (Originally published in the 1st Quarter 2002 Shareholder Report) When you’re nearing retirement, there are different life events that may be vying for your attention — leaving the workforce, relocation to a dream house, retirement travel plans, and many more. But a very important ingredient everyone should consider is preparing for the financial implications associated with retirement. Here are just a few of the things to be considered when you are five years or less from retirement. · Review options concerning employer benefits with your human resource department, such as pension distribution options, distribution time frames, estimated benefit amounts. · Begin developing the framework for a budget during retirement. Many financial advisers use the rule-of-thumb that says income needs during retirement may be 60 to 80 percent of pre-retirement income. This may be correct for some people. But some may be better off estimating as closely as possible their own retirement budget to make sure they are not underestimating retirement income needs by using a "rule-of-thumb." · Maxout your retirement plan contributions. · Assess your current insurance coverage and future needs. It could be catastrophic if all your savings were "eaten up"early in retirement because of inadequate insurance. · Review income and investment options available through retirement accounts such as IRAs, 401(k)s, 403(b)s,annuities and other savings investments. · Contact the Social Security Administration to confirm your eligibility for benefits. · Reduce debt levels to avoid being saddled with financially burdensome debt. · Consult with a financial adviser and a tax adviser as you review retirement options. There are many things to be considered in preparation for retirement,and the sooner you begin,the more prepared you will be. |
