If you think this might be the year for you to take the plunge and retire, consider using this information to help you start planning to make your decision.

Consider the following steps*

12 months before your retirement date

  • Contact your employer's benefits office (and any previous employers) to determine your eligibility for pensions. Ask about when to sign up, what decisions you'll have to make (how you want to take your payout, for example) or documents they may require.
  • Get an estimate of your monthly Social Security benefit based on your chosen retirement date. Go to www.socialsecurity.gov or call 800-772-1213 to find out your benefit at age 62, at your full retirement age or at age 70.
  • Document your monthly expenses. Go back through recent housing, utility, car, insurance, medical and other receipts (don't forget phone, computer and TV, dining out and other entertainment!) and create your "expenses" budget. Start living within your new budget now, so you can adjust it if necessary. Stash your extra money in savings!
  • Build a post-retirement budget for income and expenses from the information you've gathered. If your plan offers it, check out Retirement Dream Machine. The retirement spending view lets you model:
    • spending in retirement based on estimated expenses and goals.
    • how long your retirement savings may last.
    • how saving more or spending less could impact your retirement savings.

9 to 10 months ahead

  • Meet with legal and financial professionals to consider any tax-planning or estate-planning issues. Have you made arrangements for someone to take control of your financial or health care decisions if you can't do it for yourself? Do you have a will in place?
  • Figure out how much you'll need from your retirement plan or personal savings - to add to your Social Security benefit - to meet your regular living expenses. Many financial planners generally suggest that you not take out more than 4% of your savings in the first year of retirement and increase the amount each year by no more than the rate of inflation. Go to Dream Machine's spending view to see how long your retirement savings may last.
  • Determine if you'll have access to health care insurance if you're retiring before becoming eligible for Medicare (at age 65). Does your employer offer retiree health insurance? Or can you get health care coverage from your spouse's employer-provided plan? After age 65, will you need supplemental health insurance to cover expenses that won't be paid by Medicare? If you'll be eligible for retiree health benefits from your employer, find out how to put those in place. For more information about Medicare, go to www.medicare.gov, call Social Security at 800-772-1213 or visit your local Social Security office.

3 months ahead

  • Sign up for Social Security benefits if you plan to start them right away. You can do it online at www.socialsecurity.gov, by phone at 800-772-1213 or at your local Social Security office.
  • Contact Social Security to enroll in Medicare, if you'll turn 65 before you begin receiving Social Security benefits. If you're already receiving Social Security benefits at the time of your 65th birthday, you'll automatically be enrolled in Medicare. For information about Medicare, go to www.medicare.gov, call Social Security at 800-772-1213 or visit your local Social Security office.
  • Contact your employer's benefits office (and your spouse's benefits office) to find out how to set up your retirement and/or health care benefits at the appropriate time. Understand and meet any deadlines, so you won't miss out on any benefits you qualify for.

When the big day arrives

  • Put your new retirement budget to work for you. Sometimes new retirees buy something BIG to reward themselves for all their years of hard work. If you're tempted to go out and get that big red truck or take that trip around the world, you'll probably feel better if you put it off until you're sure your new money-in-and-money-out budget is working the way you want it to.
  • Start enjoying this new chapter in your life!


*Sources
U.S. Social Security Administration, www.socialsecurity.gov.
U.S. Department of Labor, www.dol.gov, "Taking the Mystery Out of Retirement Planning."


Publications and Web sites referenced in this material are presented for general educational purposes only. Its affiliates did not receive any compensation or consideration for referencing these titles. The opinions and information presented in these titles do not necessarily reflect the opinions of JPMorgan and its affiliates.

This material has been prepared for informational and educational purposes only. It is not intended to provide, and should not be relied upon for, investment, accounting, legal or tax advice.

Retirement Dream Machine is an investment educational tool offered by J.P. Morgan Retirement Plan Services pursuant to the Department of Labor's Interpretive Bulletin 96-1.