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Retiring This Year? Five Things to Do Right Away

Posted by David Ghiorso, CPA, April 11, 2017

So you’re ready to pack up your belongings, say farewell to your boss, and escape that stuffy office. Retirement is just around the corner! If you’re thinking of taking the leap into retirement this year, take these steps first to make sure you’re really ready.

Decide if you’re really ready. What will you do after you retire? After a month or two, staying home and watching TV really won’t be fulfilling. Line up some hobbies, join a community group or two, plan a vacation, and make plans with friends. You might even consider applying for a part time job, for extra income and personal fulfillment. Also, discuss your plans with your financial planner. Make sure you have a source of emergency funds, and that your retirement budget is reasonable for your expected lifestyle.

Investigate your Social Security options. Social Security isn’t a simple matter of paying into the system, and then collecting a check once you retire. Your monthly benefits will vary according to how old you are when you claim them. Waiting a bit longer can help you get a larger benefit check each month. But is the wait worth it? A qualified financial planner can help you do the math and make this decision.

Sign up for Medicare, if you haven’t already. Obviously, you need healthcare in retirement. But since missing the deadline for Medicare can trigger higher premiums, you want to be sure to sign up when you turn 65.

Plan for Required Minimum Distributions (RMDs). Allowing your retirement fund to grow for as long as possible is a great idea. But most qualified retirement plans require you to begin taking minimum distributions by age 70 ½. Otherwise, you could face a stiff income tax penalty. Since some people wait a little too late, and end up forced to take two distributions in one year, it’s best to work carefully with a financial planner in order to avoid unnecessary taxes.

Investigate a rollover. In some cases an Individual Retirement Account (IRA) will offer more diverse options than your standard 401(k). Some people find it helpful to roll their 401(k) funds into an IRA, but since there is no one-size-fits-all solution that works for everyone, check with your financial planner and weigh your options carefully.

Questions?  Contact us for assistance.  We specialize in working with retiring seniors!

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