1.Should you change your investment plan when you retire?

When you retire, it is much harder (financially and emotionally) to maintain your investment discipline during roller-coaster stock markets. With that in mind, you should be able to answer a few questions:

  1. Do you want to mange the money yourself or hire a professional investment advisor?
  2. What rate of return do you need to meet my retirement goals (we call that your hurdle rate)?
  3. How do you protect yourself against falling markets?
  4. What should you do to now if you think we are entering a possible market correction?

2.Are your retirement accounts truly diversified? It may be time to review your overall portfolio to make sure all your eggs are not in one basket.

3.How do I maximize my Pension in Retirement?

For many of you that have a traditional pension plan at work, you have to choose how to take the pension in retirement (although not all options are available in all plans).   It is important review your pension plan document and to understand your available options in order to maximize this valuable benefit given your financial goals. Typical decisions and options may include:

  1. Starting immediately vs. waiting until it is fully vested (such as at age 65),
  2. Taking the pension as a lifetime annuity vs. taking it as a lump sum, or
  3. Knowing your annuity payment options and survivor benefits (such single life, 50% survivor, 100% survivor, etc.)
  4. See the attached summary on How to Maximize your Pension

4.What should you do regarding your employer stock in my 401k?

If you have employer stock in your 401(k) , consider maximizing the tax benefits of the Net Unrealized Appreciation or NUA (it can be a great tax and financial planning strategy for you to consider).

5.I have worked past age 70 1/2 and I have not had to take any Required Minimum Distributions (RMDs) from my 401(k) plan. Now that I am retiring, when will I have to Start?

This topic is confusing to many retirees, and it is important to know the rules. With that in mind, please see the attached article from Ed Slott on his 7 Frequently Asked Questions and Answers on this inmportant IRA planning topic.

6.Should you keep my 401(k) with your employer or roll it over into a self-directed IRA?

This is an important decision. It is also important not to make any mistakes as they may cost you a lot of money and/or you may lose some opportunities. Also, if you have saved any “after-tax” money in your 401k, you may have the opportunity to roll-it over into a Roth IRA under new IRS rules. If your employer plan is not a 401k, but rather a SEP IRA, SIMPLE IRA or another type of plan, please review our Rollover Guide. For more on the possible mistakes to avoid when rolling over retirement accounts, please listen to the interview of our rollover expert, Jeffrey Levine, CPA with Ed Slott & Co.

7.Do you have too much exposure to your employer stock in your portfolio?

Many retirees have accumulated large amounts of exposure to employer stock in their 401ks, Restricted Stock or Stock Option Plans, and in other brokerage accounts. If you have a large amount of your employer stock, it is important to understand the risks of having concentrated holdings.

8.What actions should you take in regards to your employer stock, stock options, and/or restricted stock plans (understanding, vesting, need to exercise, cashless exercise, etc.)?

When you retire or leave an employer, have many decisions to make. If you have stock plans with your employer, it is very important to understand the vesting, tax, and financial planning considerations revolving these holdings. As some of these decisions are irrevocable, do not make any decisions without consulting your tax and financial planning team.


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