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You may be leaving the world of work, but don't forget about some vital "deadlines" you need to meet even after retirement arrives. Skipping these dates may cost you money or, at the very least, delay what you have coming.
ASAP Pay off any 401(k) plan loans! Once distributions begin, an outstanding loan will be considered part of the payout - and you will therefore owe income taxes on the loan amount (along with the rest of your distribution). Three - five years At age 59-1/2, you can make any withdrawals from a traditional or Roth IRA without a 10% penalty tax. If you're widowed, your 60th Birthday becomes important - that's when you can collect Social Security. Three years (or your 62nd birthday) You can collect Social Security at a reduced rate. Six months - one year If you're moving, investigate your new state's tax rates. Some states are far more friendly tax-wise to retirees. If you decide to move to a state with lower income-tax rates, wait until you establish residency to sell assets (such as stocks) and realize any capital gains. For example, a Maryland resident who moves to Florida can save up to $8,000 in state taxes on a $100,000 profit by waiting until after the move to sell, as Maryland's top income-tax rate is 8% and Florida doesn't have an income tax. Three months Now is the time to apply for Social Security. From the time you apply for benefits, it takes about three until you start receiving money. The good news is that, once payments begin, benefits will be paid directly into your checking or savings account, and will arrive on the same day each month. Nowadays, the U.S. Social Security Administration (SSA) has made it a lot easier to get information than in the past. Check out the SSA's web site at http://www.ssa.gov for more on what you could be getting in payments, how to apply for benefits, and the latest changes to the system. AFTER RETIREMENT One month or less On your 65th birthday, you become eligible for Social Security at the full benefit rate. On the first day of the month you turn 65, you become eligible for Medicare coverage, though your employer-sponsored health plan remains the "primary payer" if you're still working. One year or less Sign up for Medicare as you close in on your retirement date. If you wait longer than one year to sign up, your premiums will be higher. If you are already getting Social Security, you are automatically enrolled in Part A and Part B. Go To Page: 1 2 |
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