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Countdown to Retirement: Are You Ready?

Countdown to Retirement Clock Image.

Retirement is a lot different than it used to be.  

How we plan for retirement has changed dramatically over the last 40 years, and for many, the best approach to preparing for a secure retirement remains a mystery. While earlier generations of workers could rely on employer-provided pensions and health insurance, now many will need to rely on their own work-related and personal savings, plus Social Security benefits and Medicare. These retirement savings will have to last longer because Americans are living longer, often into their eighties and nineties. And as we’ve seen over the past couple of years, life has a way of throwing unexpected changes our way – so there’s a need to protect these hard-earned retirement savings. 

The Department of Labor’s Employee Benefits Security Administration can help you plan for retirement with free resources on financial planning, employer-provided retirement plans, and more. The more you know before you start making decisions, the better off you will be in retirement. Here are some of the issues you may want to consider in your retirement planning: 

  • Retirement Savings Plan: Your employer’s retirement savings plan is an essential part of your future financial security. If you have a 401(k) or other retirement savings plan at work, sign up and contribute all you can. If your employer also contributes to the plan, sometimes as a matching contribution, find out how much the employer match is and how much you need to contribute to get all of it. And don’t touch your retirement savings – the longer you leave the money there, the more time it has to grow. Read more about using your employer’s retirement plan here

  • Social Security: Choosing when to begin receiving Social Security benefits is an important part of deciding when to retire. If you choose to start receiving benefits when you reach full retirement age, you will receive your full benefit. If you delay claiming benefits beyond full retirement age, you can earn credits that increase your monthly benefit by about 8% for each year you delay claiming, up to age 70. If you start collecting Social Security benefits before you reach full retirement age, your benefits will be reduced by up to 30%, depending on when your benefits start. Find more information on your Social Security retirement benefits here. 

  • Medicare: Medicare is health insurance for those 65 and older. Generally, you only need to sign up for Part A (Hospital Insurance) and Medicare Part B (Medical Insurance) once. Many retirees buy a Medicare Supplement Insurance policy, also called Medigap, to help pay some of the health care costs that Medicare doesn’t cover. Medicare also has a Part C (Medicare Advantage Plan), which serves as an alternative to traditional Part A and Part B coverage.  You do not need to purchase a Medigap policy if you join a Medicare Advantage Plan. Lastly, there is the Medicare prescription drug program (Medicare Part D). By paying a small premium you can get prescription drugs at a lower cost. More details are available on Medicare’s website.  

  • Protection Against Fraud and Abuse: Elder abuse, including financial exploitation and fraud, is a growing problem. Financial exploitation can take many forms, including cashing checks without permission; misusing or stealing money or possessions; coercing or deceiving an older person into signing a legal document; and the improper use of conservatorship, guardianship, or power of attorney. Concerned individuals who spot the warning signs of a possible problem can call state and local agencies for help. For more information, visit the Consumer Financial Protection Bureau’s website. 

  • Making Your Money Last: How will you make your retirement income last as long as you do? More saving, more investing, and less spending will boost your confidence and your financial bottom line as you near the end of your working life. For now, you will probably need to focus on adding to your nest egg and investing it wisely. Take into account that you will also have income taxes to pay, but there are ways to minimize these. You may also want to take a look at financial products and services that could help build some financial security into your retirement. Read more in Chapter 5 of “Taking the Mystery out of Retirement” (page 36). 

And if you’re about ten years away from retirement, you’ll want to attend EBSA’s upcoming webcast “Countdown to Retirement: Are You Ready?” on Tuesday, July 26 at 2pm ET.  

You’ll have a chance to learn more about all the topics mentioned above from retirement experts at EBSA, the Social Security Administration, the Centers for Medicare and Medicaid Services and the Consumer Financial Protection Bureau. They’ll discuss challenges when planning for retirement, making the most of your employer’s retirement plan, basics about Social Security retirement, Medicare enrollment and benefits, and avoiding common financial abuse, fraud, and scams. Register here for this free webcast today, and spread the word! 

For more information on planning for retirement, employee benefits, or what EBSA does, visit our website. You can also contact a benefits advisor with your questions by visiting askebsa.dol.gov or calling 1-866-444-3272. 

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