Tips for Better Financial Planning At present there is nothing scarier than crashing markets! Hence, the scaring question of the hour is whether you have planned adequately to be able to survive in such tough situation. Irrespective of the extensive financial planning that you might have done, you will still be concerned regarding the post retirement financial security. You can steer clear of any adverse situations just by bearing a few points in your mind. Thinking, what are these? Read below to know more about them: 1. Keep an eye on pension plans: An employer cannot take the benefits away that you have earned, but these benefits may reduce. Traditional pension plans are witnessing losses in economic instability and thus companies are required to make additional contributions. Hence, the plan benefits of new or existing employees are being suspended by the companies. Hence, you need to be alert and keep a check on when your employer makes changes in the pension plan. 2. Donâ€™t switch jobs frequently: As job change can affect your pension benefits, it is better to check on its effect before switching your job. In most cases these plans have a five-year frame for vesting into benefit. Same is the case with 401k plans where employer contributes same as you. Sometimes, it is advisable to stick to your current job a little longer for yielding better benefits. 3. Avail pension benefits from previous employer: A good number of employees as ignorant of the pension benefits before quitting the job. Before you change job it is advisable to check with the employer about the benefits that you are entitled to. Definitely track your claim to benefits after your retirement, if the conditions are in your favour. 4. Donâ€™t retire early: The frenzied way of life has resulted in most people opting for retirement before the age of 65 years. Early retirement reduces the retirement benefits considerably. Your income through salary for the years you could have worked, the extra benefits you are entitled to and the retirement amount will be foregone due to early retirement. 5. Lose health insurance benefits: The health insurance benefits for retirees are phasing out or they are being asked to borne a large part by the companies as the cost of health are on rise at high rate. However, you are eligible to Medicare benefits until you turn 65 years of age. Post that too, a few of the medical expenditures are covered. Thus, it is vital to consider this prior to your decision to retire earlier than 65 years of age.
6. Change in Social Security benefits: Instead of 65 years as the retirement age, now it has been extended to 67 years. The people born during and after the year 1938 are the ones mostly affected by this change in retirement age. The reduced benefits can be availed at age 62 years of age. A reduction of 30% is now applicable instead of 20%, in permanent benefits. So, drop the idea of early retirement for financial security. 7. Ditch lump-sum distribution: Lump-sum distribution is certainly not the safest bet. Lump-sum distributions are offered by some traditional pension plans as an option against monthly pension benefits. Settlement in lump-sum manner should be completely rejected. Though the offer looks attractive but, this sum is hard to be invested through any other monthly pension plan. Retirement Financial Planning is strenuous and tough. Thus, it is critical to know about all the possibilities prior to your life changing retirement decision. You can call us anytime through these numbers 800-900-5867 and request our financial planning. For more information visit our site ING Retirement.
Published on Oct 4, 2013
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