Review Social Security and Pension Benefits: Rules can change and data can be entered incorrectly. Go through your benefits statements with a fine tooth comb to check for errors and correct as necessary. Make sure the benefits you were expecting to receive match the current rules.
Long-term Care Insurance: Examine the risks and benefits of long-term care insurance so that you can make an informed decision. Get cost estimates and learn the various alternatives when purchasing this insurance product.
Financial Planning: Are you going to take a lump sum payout or monthly payments? Are you going to leave your 401(k)s where they are or roll them over into an individual retirement account? Are you going to take Social Security as early as possible or delay for a bigger monthly benefit? What is your investment strategy? What will be your asset allocation during retirement? Are you going to purchase fixed annuities or accept the risks of fluctuating investments in hope of a higher return? You are entering the window where these decisions must be made.
Some of the other financial decisions you’ll be facing may be dictated by government rules about when and what you must withdraw from your tax-deferred retirement accounts. Others may be driven by your concerns about healthcare or your desire to leave money to your heirs. At the least, you’ll have to consider:
- Shift some investments from stocks to bonds or insured accounts to produce more income with fewer risks, in case of a sudden downturn in the financial markets.
- Roll over retirement assets into IRAs or annuities to preserve their tax-deferred status.
- Consider catching up on retirement contributions. Once you are over 50, you may qualify to make additional catch-up contributions to your retirement plan.
- Pre-Tax 401K Catch Up Limits
- Manage your income stream. Start planning how you'll convert your assets to a dependable income that can last your lifetime. Be sure to consider all sources of income, including Social Security.
- Find ways to reduce estate taxes and cover those that are unavoidable.