What You Should Know About Pensions And Retirement Savings

Posted on: October 25th, 2024 by webolutions

You’ve worked hard for many years. Now you’ve reached the point where you just can’t leap out of bed every morning, eager to begin your workday and deal with your boss and co-workers. Retirement was once a place that was many years down the road. Suddenly, you’re celebrating a multiple anniversary of your 39^th birthday, and you’ve decided to start the process of retiring. People who work with you are asking you how much longer you intend to work. Your younger co-workers now refer to you as ma’am or sir. It’s time to move on, for many reasons! Here are some things you should consider before you tell HR to start planning your retirement party.

1. You’ve spent your entire career with one employer that has a pension plan that I’m eligible for a benefit from when I retire. Should I take all my pension benefits in a lump sum, or spread payments out over time? Should I roll the money into an IRA or purchase an annuity with my accumulated retirement savings?
2. You’re eligible to receive a monthly social security retirement benefit. You can elect to receive a benefit starting at age 62. You may delay receiving a benefit until age 70. Should you take the benefit earlier rather than delay? What age is right for you to begin your benefit?
3. You’ve worked for multiple employers during your career. You have a 401k balance from several different employer pension plans. Can you combine these balances into one account? Should you take distributions now or later? You have savings in something called a Roth account. Should I take distributions from Roth accounts first? Will I be taxed on money I take from these accounts, and if so, what is my tax rate?
4. During your career, you’ve worked for employers in both the private and public sectors. You are eligible for both social security retirement benefits and retirement benefits from a public pension plan or plans. How do you maximize your retirement income from these private and public pension plans? Will the amount of my social security retirement benefits be reduced by my retirement benefit from a public pension plan? Which benefit should I take first, social security or the public pension benefit?

Sutherland Legal Services can do a legal check-up for you so you make informed decisions before you commence your retirement benefits.