Need to Know: What to do in the year before you retire

If retirement is going to be a reality to you in the near future, it’s important to make sure you spend the year leading up to retirement effectively. After working so hard to plan and save for the retirement you want, make sure you use your final year to ensure you can enjoy the fruits of your labor. Here’s a primer on what you need to do:

Determine if you retire when you think you can.
Everyone has an age in mind, but it’s important to make sure your dream matches up to reality. Analyze your spending habits and compare them to what you expect to receive annually from your various income sources — be sure to include Social Security, pensions, and annuities. What does that analysis tell you? How do you need to adjust based on the results?

Figure out how to handle your 401(k) or other retirement accounts.
Upon retirement, you generally have three options with an employer-sponsored plan. You can transfer the money into an IRA, leave your savings where they are, or cash out the account. Each option comes with associated pros, cons, and, in some cases, penalties. Make sure you understand the implications of each option.

Decide what to do with employer stock
Much like your retirement accounts, you will have options when it comes to employer stock. Again, each option has parameters, so it’s essential to fully understand each one.

Plan how to avoid penalties on early withdrawals.
Early withdrawals (typically considered before age 59 1/2) often carry a 10% tax penalty. But did you know there may be exceptions to this penalty? For example, if you leave a job after age 55 (or 50 for certain types of public employees), you can withdraw from that employer’s plan without penalty. This is just one example of the scenarios that may help you avoid early withdrawal penalties.

Decide on how your pension benefits will be paid.
Pensions can usually be paid out in one lump sum or as annuity payments (i.e., a regular sum of money on a regular basis that lasts your lifetime as well as the lifetime of your spouse). Understanding the tax implications of both options and exploring how the pension money might be used can help guide your decision.

Decide on when to start Social Security
Typically, you can begin receiving Social Security any time between the ages of 62 and 70. But it’s important to understand how your age affects your monthly income. You can walk through various scenarios on the Social Security website.

Line up health insurance
Your age will likely affect the health insurance options available to you — so it’s best to sit down and determine your health insurance scenario well in advance of retirement.

These are just a few of the key steps you should take in the 1-2 years leading up to your retirement. Planning for retirement can be overwhelming, which is why the Robin S. Weingast & Associates team is here to help. Contact us today so we can be sure you’re on the path to a happy and fulfilling retirement.

 

Podcast of the Month: Planning for the Unexpected

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You may be healthy today, but what about tomorrow? When Mark’s mother was 84 she seemed perfectly healthy, but that all changed in the blink of an eye. Tune in as Financial Professional Mark Wutt shares the obstacles he faced when handling his mother’s long-term care arrangements, what he wishes he had done differently, and how you can plan for the unexpected.

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Resource of the Month: Sources of Disability Income

Image credit: graphicstock.comMay is Disability Insurance Awareness Month, and if you’re like most people, you probably haven’t planned for the possibility of becoming disabled, nor are you aware of the options available to you if you are unable to work due to a disability.

Our May Resource of the Month outlines sources of disability income available to you, as well as the pros and cons of each one. Read it today and get up to speed on the options available to you and your family!

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Podcast of the Month: No Necktie Needed

When you think of a financial advisor do you picture a man?

Meet Juli McNeely, Financial Professional and former President of the National Association of Insurance and Financial Advisors. In her new book and on this episode “No Necktie Needed” she tells the story of how she thrived in a male-dominated industry, and how she’s inspiring her fellow advisors to educate and engage women as more and more females become primary breadwinners and decision makers.

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Image credit: https://www.graphicstock.com/stock-image/two-women-taking-notes-at-a-business-presentation

Podcast of the Month: Big Changes Coming in 2017, The Pros & Cons

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Are you planning on retiring someday? The financial services industry is going through a massive overhaul via the Department of Labor! While this may not be front page news for the average citizen, this has huge implications for the way you will be able to seek out and pay for advice that helps you save for retirement. In our latest monthly podcast, Dale Brown, CEO of the Financial Services Institute helps you weigh the pros and cons of the changes, and fills you in on what to expect.

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Resource of the Month: Planning for the Sandwich Generation

Robin Weingast financial planning for couplesAre you raising children (or have your adult children come back home), saving for your own retirement, and also involved in decisions about your own parents’ healthcare and financial planning? If so, then you’re one of the increasing number of people who are part of “The Sandwich Generation,” which comes with practical and financial complications.

Hitting your financial goals as a member of The Sandwich Generation can be difficult, which is why we’re offering you a Resource of the Month with tips on how to keep your eye on your goals, even as your many needs compete for your attention.

Click here to Download Planning for the Sandwich Generation.

Need to Know: The High Cost of Employees Not Retiring on Time

Why does Retirement Age Matter?

In retirement planning, we often focus on the “end goal” — making plans related to the age we want to be when we retire, and what our spending level needs are after we don’t have a steady income coming in from our jobs.

Retirement Book On Laptop Showing Pension Plans And Elderly Advices

But do you know the effect of what happens when we aren’t ready to retire on time? And do you know what that means for your company if an employee can’t retire on schedule?

At a recent session of “Plan Sponsor University,” Tom Foster of MassMutual, outlined some key risks to a company (and its employees) when someone can’t retire on schedule and has to work well beyond the standard retirement age. They include:

Lower productivity: Workers who have to stay on longer than the typical retirement age may become less and less productive the older they get. This affects the bottom line of your company in significant ways.

Higher healthcare and workers compensation costs: On average, older workers have higher healthcare costs and premiums as well as higher worker’s compensation rates that must be paid by employers. These costs can also be passed on to other employees.

Higher salary costs: Seasoned employees are typically compensated at a higher rate than entry-level employees.

Unexpected turnover: Older employees often hold up the advancement of younger, entry-level employees, who cannot be promoted because their more experienced colleagues occupy senior-level positions. Without growth opportunities, younger employees will seek out new positions where they have more chance to advance their own careers.

Financial wellness: Studies show that employees who are financially stressed — and we can assume that someone working well beyond retirement age will be financially stressed —are prone to working more slowly and may take more sick days.

What’s the solution?

A company-sponsored defined contribution plan, such as a 401(k), is a key way to ensure the viability of your company. Not only can it help your employees reach their retirement goals, it will also set your company up to succeed, by ensuring that your employees are retiring on time and not holding up the growth of your company.

Want to evaluate your retirement plan or need assistance setting up a company sponsored retirement plan? Contact the Robin S. Weingast & Associates team today to help!

Monthly Podcast: Health Insurance: Get Ready for Open Enrollment

robinweingast-health-insuranceListening to the news these days, it’s hard not to be concerned and confused as we prepare for Open Enrollment. On this month’s podcast, Health Insurance Consultant, sheds a little light on what’s happening to all the big carriers, what could happen after the presidential election, and why consumers have the ball in their court to demand changes.

>>> Click here to listen to this month’s podcast on Open Enrollment! <<<

Resource of the Month: What You Need to Know About IRAs

weingast_iraLooking to help a recent graduate understand the nuts and bolts of saving for the future? Our May resource will tell you everything you need to know about individual retirement accounts (IRAs), which are a tax-savvy way to put aside money for retirement. While employer sponsored plans continue to be a widely used option, there are additional ways to help a recent graduate make sure he or she is on track to have an adequate nest egg. You may even learn a thing or two about saving for your own retirement!

 

Click here to download our May resource: What you Need to Know About IRAs