As you get closer to retirement, you’ll have many questions to answer, and the answers will differ based on where you work and the timing of your retirement. As a result, it’s best to contact your employer to gather pertinent information about your end-of-work arrangement for an easy transition.
There’s a lot you need to know about retirement. It’s not always easy to ask the right questions, and sometimes difficult to figure out where to begin. Below are a few things to think through as you are preparing for retirement.
What Is My Official Retirement Date?
The day your organization accepts you as a retiree is called your official retirement date, and it’s critical to understand. This date has the potential to make a big difference in the weeks immediately following your retirement, especially when it comes to group benefits.
Knowing this information can be quite beneficial while arranging your Medicare and Medicaid Supplement Plans. For example, let’s assume a retiree intends to leave their job in 2022. On the other hand, their employer’s records list your official retirement date as Jan 3, 2023. This might imply medical coverage continues through January 2023 rather than ending at year end. It’s crucial to know when your date is so that you can pre-plan for benefits.
Do I Have a Retirement Agreement? If So, What Are the Terms?
There’s a chance you don’t have a contract with your employer regarding your work, but if you’re confused, talk to your human resources department. These retirement contract provisions, such as non-compete clauses, might be critical to your retirement planning. It is a good idea to review your retirement agreement with your employer and a financial advisor.
What Happens to My Health Benefits?
One of the most essential things to consider as you approach retirement is how your health insurance will change. This will partly be determined by your employer’s rules. Find out whether your firm offers group health insurance benefits after retirement. If they do, you will likely be required to pay a higher monthly premium than you did while working.
If your employer doesn’t provide health insurance, or if their rules prohibit you from receiving health benefits after retirement, you’ll have to begin searching for an individual policy when you retire. This can be costly, especially if you have preexisting health conditions.
If you have a health savings account, read our blog for more information on using the money saved in that HSA for health-related expenses after you’ve retired.
What Happens to My Employee Stock Options?
Suppose you have employee stock options from your company. In that case, it’s essential to know how they’ll be treated when you retire, especially whether vesting will continue or cease on your resignation date. Find out what will happen to any unvested shares upon your departure. Will the value of those be forfeited? Unvested shares may have significant value, so it’s crucial to understand how they will be handled when you retire.
Stock options can be a tough nut to crack when it comes to retirement planning. It may be worth consulting with your financial advisor or retirement pro for assistance.
What Happens to My 401(k)?
If you retire and your 401(k) balance is more than $5,000, your employer is required by law to keep your account open, unless you choose to transfer those funds elsewhere. Further, you won’t have to take anything out until you’re 70½; this is the age at which you must start taking minimum payments.
The only circumstance when you would have to cash out your 401(k) is if the account has less than $5,000 invested. In that case, an automatic lump-sum distribution will occur, and those funds will be sent to you.
Every retirement saver’s circumstances are different, so make sure to consult your employer about the specifics of your benefits. For more information on what retirement savers need to know if 2022, visit the Slavic401k blog.