It will be important to have all of these
documents stored in one accessible spot. Having this
information readily available will make it easier to make
important retirement and financial decisions. Reviewing
statements will make it easier for pre-retirees to take stock
of their financial picture, set up budgets and determine if
they are on track with their financial goals.
COVER THE BASICS
Employees will have to identify their most
important needs. Begin by making a list of absolute
necessities.
Basic monthly living expenses—this figure may be higher in early
retirement years and decrease in later years, should be based
on
a careful budget estimate, not percentage guesses. After identifying this figure, employees can build a budget that includes discretionary travel, hobbies and other activities.
a careful budget estimate, not percentage guesses. After identifying this figure, employees can build a budget that includes discretionary travel, hobbies and other activities.
Housing—consider
the cost and viability of staying in the existing home. Some
may choose to downsize or relocate, perhaps to a warmer
climate, or move to a continuing care facility.
Health insurance—health costs in later years can be staggering.
Employees need to carefully review their health insurance
options, especially if they are planning to retire before
becoming eligible for Medicare benefits. And those
that qualify for Medicare need to remember that the coverage is very basic. Budget for the cost of additional “Medigap” coverage to pick up costs not covered by Medicare.
that qualify for Medicare need to remember that the coverage is very basic. Budget for the cost of additional “Medigap” coverage to pick up costs not covered by Medicare.
Long term care insurance—Though more than half of retirees that reach the
age of 65 will need long term care, very few employers offer
long term care insurance as a retirement benefit and standard
medical insurance does not provide coverage. Employees need to
plan for the possibility that they will need extended nursing
home or in-home care at some point in the future.
Estate planning—Employees should ensure they and their property
or other assets will be taken care in accordance with their
The author is the managing director of
retirement services for the ICMA Retirement Corporation.
here’s no
doubt that after years of public service, many state and
local public sector employees have already started making plans
for their retirement. But before making plans to enroll in
classes, volunteer, or take the trip of a lifetime, there are several steps late career workers need to take to ensure they have a sound financial plan in place to support them throughout their retirement years.
The preretirement stage is a critical
planning period for pre-retirees to get organized, take stock
of their situation, and investigate the many decisions that
will affect their transition into retirement or possibly into a
second career. Following are two simple steps to move late
career workers closer to their goal of a financially sound
retirement plan:
STEP ONE: GET ORGANIZED
Pull together your records, including:
1. 457 plan statements;
2. Defined benefit pension and/or defined
contribution plan documents and statements;
3. IRA statements;
4. Social Security statements;
5. Military records (if expecting
benefits);
6. Qualified domestic relations orders;
7. Annuity statements;
8. Insurance policies;
9. Bank statements;
10. Loan agreements and mortgage
statements;
11. Credit card statements;
12. Utility bills;
13. Tax information; and
14. Mutual fund and/or brokerage
documents.
