Retirement planning can be stressful because there are a lot of things to keep track of. Some of the steps that often get overlooked are announcing to your employer that you are going to retire, deciding when to take Social Security, and figuring out a plan for your 401(k). So, to start your retirement off on the right foot, try taking some time beforehand to make a plan.
Leaving your job may require writing a letter to explain your plans while also choosing a date for your last day of work. One of the most important aspects of the letter is including some lines expressing your thanks and appreciation. As you write your letter, try to start thinking about your future plans and goals. Do you want to consider working part-time or consulting? Are you willing to train a new employee to help with the transition?
Before you start writing your letter and preparing your announcement, first make sure that you have qualified for all of your retirement benefits. This includes checking to see if you have any ongoing healthcare benefits, looking at your 401(k) plan, and thinking about when you will sign up for Social Security. You can claim Social Security benefits anywhere from age 62 to 70, but the size of your benefit will vary depending on when you claim. If you want to claim past your full retirement age, your benefit will increase by 8% per year you defer until age 70 for beneficiaries born in 1943 or after.1 Next, you’ll want to figure out what to do with your 401(k) if you have one. Although you may have the option to cash out of your old 401(k), you will pay tax on those funds at ordinary income rates. This could significantly increase your tax burden and could mean losing out on years of tax-deferred growth in the future. Instead, you can roll over your old 401(k) into an IRA. This way, you don’t pay tax on what you roll over and can continue making tax-deferred contributions if you earn income. And, you can potentially gain access to more investment options so that you can pursue an investment strategy that better suits you.2
This is a huge milestone in your life, and it is important that you put thought and care into your decision so that you can start your retirement off on the right foot. Talk with a trusted financial professional about your personal goals and financial plan for the future. We’ll sit down with you one-on-one to discuss your goals and help put you on the right path toward achieving them. Contact us today to request your complimentary, no obligation financial review!
Because investor situations and objectives vary this information is not intended to indicate suitability or a recommendation for any individual investor.
This is for informational purposes only and should not be relied upon as tax or legal advice. Please consult the appropriate professional regarding your individual circumstance.
Statements concerning financial market trends are based on current market conditions, which will fluctuate. Market condition statements herein as of May 2022.
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Advisory Services offered through Asset Strategy Advisors, LLC (ASA). Securities offered through licensed representatives of Concorde Investment Services, LLC (CIS), member FINRA/SIPC, or RCX Capital Group, LLC, (RCX), member FINRA . Insurance offered through Asset Strategy Financial Group, Inc. (ASFG). ASA, CIS, RCX and ASFG are separate companies.
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