Having recently gone through retirement, I believe that I can provide somewhat of a roadmap, as follows:

  1. Prior to retirement, schedule any medical or dental appointments that might be better covered under current employer-sponsored benefit plans, if any.
  2. Get in touch with the Social Security Administration to initiate your monthly payments as well as Medicare Coverage.  THEY CAN BE FRIENDLY.
  3. Contact your Human Resources or Personnel Department to initiate your Retirement as well as determine what benefits, if any, you might receive as a Retiree.  For instance, I was advised that I qualified for a Corporate Retiree Medicare Supplement Program that provides more flexibility than I could purchase as an individual even though my former Employer doesn’t pay anything toward it.  Also, my wife can be included, once she retires.
  4. Focus on your finances:  Anticipated Income (Social Security, Pension and other payments) and regular payments (Rent/Mortgage, Various Insurance Policies, Utilities, etc.).  Don’t forget payments for Elderly or Disabled Family Members that are dependent on you.  Also, be sure to factor in sufficient additional money to cover recurring maintenance on your home or autos.

When it comes to Pensions, 401(k)s, or other Company-Sponsored Retirement Plans, you will often have the option of taking either a regular monthly payment or a Lump-Sum Distribution.  There are several things to consider here:

1. Leaving any assets in a Company Plan will remain the assets of your former employer.  This can be especially important in the event of a comp[any that might fall on hard times.  Pensions, for instance, might fall under the PBGC (Pension Benefit Guarantee Corp.), which is basically a bankrupt Government Agency.

2. Think twice (if not more) before accepting a monthly pension, 401(k) or other benefit.  Basically, a monthly pay-out is an Immediate Annuity, the regular payments are mostly based on: current interest rates and your life expectancy.

  • A. Right now, interest rates are the lowest in decades, which would reduce your payments.  Also, the amount that you receive would generally not increase when inflation rises.  Hence, over time, you might lose purchasing power.
  • B. Once you agree to receiving a monthly, annuitized payment, you will generally have very little flexibility.  Oftentimes, you will have the ability to base the payments on your life, or joint with a spouse.

3. I would generally recommend taking a Lump-Sum payment for any benefits.  In most cases, you can roll them over TAX-FREE into an IRA.  You would then have control over those assets, normally more investment or other options and, if something were to happen to you, your beneficiaries would have access to them.

The key thing is to have a Plan, do your homework, perhaps speak with colleagues who had retired recently. And, if you don’t have a clue, choose a Financial Advisor who can lead you through the Process.  SEE THE RELATED POST:  CHOOSING A FINANCIAL ADVISOR.


  1. #1 by Heather P. on May 21, 2012 - 1:06 PM

    Hi Joe! Congratulations and welcome to retirement. You and my dad should get together sometime -:). Thanks for the good tips, and good to see you blogging…I’ll check back soon. Also, we have updates on Caleb at Tell Joan hello from us.

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