Life Events

Retirement
Congratulations, you made it. Retirement...time to relax, travel, volunteer in your community, or do whatever it is you have been wanting to do. However, even though you may not have to get up each morning and go to a job, you still have work to do. Your task now is to manage the retirement accounts and other assets you've accumulated to ensure that they last.
With today's rising life expectancy rates, people are living 20, 25 even 30 years or more into retirement. That means that today's dollars not only have to be preserved but have to keep growing as well. When planning for retirement you should consider investment return; taxes; and inflation, one of the biggest threats to retirement savings.

Other things you need to keep in mind:
Is retirement time also rollover time?
After you retire, you should consider taking a rollover from your former employer's 401(k) plan into an IRA. IRAs offer a wide array of investment options and may have more flexible payout options than many employer-sponsored plans. Also, if you have any concerns about the ability of the employer-sponsored plan to meet its obligations, rolling your retirement assets over to an IRA will give you a measure of control over your savings.

You may also have the option of taking your pension plan benefits in an annuity. There are a number of factors to consider including, your health and that of your spouse, how long you estimate your retirement will last, and your life insurance coverage.

Don't automatically sell all of your stocks.
Retirement is not the time to give up on growth. Even after you retire, you should consider seeking to grow a portion of your assets in order to keep pace with inflation. Depending on your circumstances it may be in your best interest to continue at least a portion of your allocation to growth-oriented stocks. As time goes by, you may be able to shift a portion of your allocation into income-producing investments.
You may also have unexercised company stock options. Any unexercised incentive stock options lose their tax-favored status three months after retirement, so plan carefully.

Update your beneficiaries.
If you plan to leave an inheritance, IRAs can be a good choice over 401(k) plans. The rules relating to 401(k) plan beneficiaries can be complicated. Self-directed IRAs, generally offered through financial services firms and mutual fund companies, generally offer many beneficiary options. Upon your death, many self-directed IRAs offer your beneficiaries with the ability to take minimum distributions annually over their life expectancy. Many 401(k) plans do not offer this option to your beneficiaries. If you haven't already done so, review your beneficiary designations and update them as necessary. Remember, in order for your heirs to inherit your IRA they must be specifically named.

Watch your withdrawals.
Even if you don't need the money, you must make mandatory withdrawals from your retirement plans. If you have a 401(k) or traditional IRA, you must begin receiving a minimum distribution from your tax-deferred accounts by April 1 of the year after you turn 70 ½. If you are still working for your company you may be able to delay these mandatory withdrawals until April 1 of the year after you retire from your employer. If you do not take the minimum required distribution, you will be subject to federal penalties.

Social Security Benefits
You may be eligible to begin collecting Social Security benefits at age 62. However, it will be a reduced benefit until you turn 65. You need to decide when to start receiving these benefits by considering your post-retirement income. You can start receiving benefits at 62, 65 or wait until age 70.

Insurance
Consider what happens to your employer-sponsored insurance benefits after you retire. Benefits such as life insurance, health and dental insurance may end after you stop working. If so, you need to arrange for individual coverage.

Names and/or addresses on important accounts and documents to ensure accuracy such as:

• Social Security
• Bank accounts
• Credit cards
• Drivers license, auto registration and insurance
• Property titles
• Insurance policies
• Memberships
• Voter registration
• With your employers

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