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At present there is nothing scarier than crashing markets! This alone is enough to give you chills and consider whether your financial planning is enough to save you in tough times. Financial security post retirement will always be your worry and concern regardless of your efforts put in financial planning. You can steer clear of any adverse situations just by bearing a few points in your mind. Wondering what they are? Find out about these points in the following pointers: 1. Keep an eye on pension plans: Benefits might reduce or change but, an employer cannot take them away. Economic instability is resulting in losses for traditional pension plans and therefore demanding extra contribution by the companies. Thus, many companies are freezing the plan benefits of newer or existing employees. Hence, you need to be alert and keep a check on when your employer makes changes in the pension plan. 2. Don’t switch jobs frequently: If you have traditional pension plan, it is advisable not to change the job without thinking about the effect on the pension benefit. Mostly the benefits of such plans can be reaped only after five years. Same is the case with 401 (k) 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. In case the situation is favorable, then do keep a track for claiming benefits post retirement. 4. Don’t retire early: In this hectic life most of the people like to retire before 65 years of age. 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 steep increase in the cost of health insurance is resulting in most companies deciding to phase out the health insurance benefits for the retirees or transferring a major amount to them. 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. This is an important consideration to be made before you plan to retire before 65 years. 6. Change in Social Security benefits: The age of retirement has been increased to 67 years from 65 years. The people born during and after the year 1938 are the ones mostly affected by this change in retirement age. At the age of 62 years comparatively decreased benefits can be availed. There is an increased reduction in permanent benefits to 30% from 20%. So, drop the idea of early retirement for financial security. 7. Ditch lump-sum distribution: Agreeing to lump-sum distribution is not a very safe option. Some traditional pension plans offer lump-sum distributions as an alternative to monthly pension benefits. Ditch lump-sum settlement plan. It is tricky to invest such a sum in some monthly pension plan, even if the offer looks beneficial. Financial Planning for retirement is not an easy task. It is important to be clear with the options before you take the big decision of retirement. Visit http://www.theretirementgroup.com/new/netbenefits for more Annuity and Financial plan Tips and Tricks!
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