How to give yourself a retirement benefits checkup

Written by ryan. Posted in Uncategorized


Published on February 02, 2011 with No Comments

by Sharon OíBrien

Have you taken a good look at your retirement benefits, and the savings you will have available when you are ready to retire? If not, you have lots of company.
Only about four in 10 workers have attempted to calculate their retirement savings needs, according to the Employee Benefit Research Institute (EBRI), a nonpartisan, nonprofit research institute focusing on health, savings, and retirement issues. EBRI recommends that workers do a comprehensive retirement benefits checkup each year before they retire.
Start your retirement benefits checkup by taking a complete inventory of the retirement benefits that will be available through your employer and the government. EBRI suggests asking yourself the following questions:
Employment-based benefits: Have you checked with current and former employers to see which benefits you are qualified to receive in retirement? In some cases, you may qualify for retirement or other benefits at an employer you left several years ago.
Keep in mind that your previous employer may have a new name and headquarters because of mergers.
Retirement savings goal: Have you estimated how much money you will need to save for a comfortable retirement? Look online for a helpful and free online calculator called the Ballpark Estimate.
Social Security statement review: Have you reviewed your latest Social Security statement for accuracy and contacted the Social Security Administration with any corrections? Watch for your Social Security statement in the mail each year, about three months before your birthday.
Eligible for a ìtraditionalî pension? If you are eligible for a traditional benefit pension, have you asked your employer for a written list of your payment options and how far in advance you need to apply? You can often review a summary of the plan on your employerís Web site.
Consolidating 401(k) accounts: Have you accounted for all the 401(k) plans you may have had at various employers, and thought about consolidating your retirement funds, either in your current employerís plan, if permitted, or transferring them into a rollover IRA?
Tax consequences of 401(k) distributions: Have you explored the options available to you for getting distributions from your 401(k)? And have you examined the tax consequences of each option when you retire and have do decide what to do with your 401(k) assets?
Health benefits: Regarding health benefits, if you plan to retire before you qualify for Medicare, have you checked on the cost and coverage options available in the private market? Have you checked to see if you would qualify for extended health insurance under the so-called COBRA law, which allows many workers to extend their employment-based health insurance for up to 18 months after they leave a job?
Eligible for retiree health benefits? Have you checked to see if you currently qualify for employer-provided health benefits in retirement (such as Medicare supplemental insurance) and how much they cost, compared with those available on the private market?
Any other job-based benefits? Have you checked to see if your employer provides other benefits, such as long-term care insurance, that you can buy before you retire and maintain once you have left your job?
Beneficiary updates: Do you have a will? Have you specified or updated beneficiaries in cases where that is required? If you donít update your beneficiaries, your assets could be tied up in probate or go to someone you did not want to benefit.
For more information, e-mail OíBrien at sharon@sharonobrien.net, visit www.sharonobrien.net, or call 503-799-2668.

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