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Preparing to Retire: Are you ready? Let's find out!

Getting ready to retire is a big step! It means closing one chapter and beginning another. To make sure you’re as prepared and informed as possible before you hit ‘submit’ on your retirement application, make sure you’ve considered the following questions;

Are you eligible? How much will you receive? Log in to myASRS to see the date you become eligible for early (reduced) and normal (unreduced) retirement and how much you are estimated to receive as a monthly pension benefit. While you’re there, see how long you would need to work to reach the next multiplier (and make your benefit bigger). You can also customize your estimate based on different dates and retirement options.

What happens if you pass away? Is there anyone else (spouse, child, significant other) who would be financially harmed if you were to pass away and your pension benefit stop? Choosing an annuity option is one of the most important decisions you will make.

If you’re married and would like to choose a straight life annuity, which has no guaranteed survivor benefit, make sure you have discussed this with your spouse.  Married members choosing a straight life annuity must submit a completed and notarized spousal consent form when they retire.

Have you researched your health insurance options? Research all the health insurance options available to you to determine whether you will receive health insurance coverage from the ASRS, your former employer, your spouse or private insurance. If you are nearing Medicare age, research what you will need to do and what your options are.

In addition, look into whether or not you are eligible for the premium benefit supplement, how much you will receive, and whether you would like to pass the premium benefit to a beneficiary in the event of your death.

Where will you live? Health insurance options, taxes, and possibly your banking selection can be impacted by this decision. If you plan to live outside of Arizona permanently, or just for parts of the year, make sure you know how that decision will affect you.  If you plan to live internationally, make plans for where your pension will be deposited, as ASRS only permits direct deposit to US accounts.

Will you be purchasing service? If you have a current service purchase agreement, or plan on buying service on or before retirement, make sure you know what you need to do, how much it will cost, and what the different payment options available to you are.

Are you interested in a partial lump sum? While the idea of receiving a large cash payment at retirement is tempting, it means that your monthly annuity, something you may need to rely on for 20 years or more, will be permanently reduced.  Be sure you weigh the pros and cons of a partial lump sum before you retire.

Do you plan to work for an ASRS employer after you retire? If you plan to work part time or full time for an ASRS employer, make sure you read up on what you need to do to stay within the rules for returning to work.

Can you afford it? Before you decide to stop working, take a look at Can I Afford to Retire to view some typical scenarios that estimate an average monthly pension, social security, retiree group health insurance expense and tax liability to see how far your retirement income might go and how important personal savings is to your planning.

Assessing how much things will cost and how much income will need to maintain your lifestyle in retirement will help give you peace of mind.

Ready to get started with your planning? Would you like to find all your ASRS retirement planning resources in one place? Well, you can! Visit Retirement Central, which pulls together a variety of retirement-related resources into one convenient dashboard. Whether you want to estimate a benefit, have questions about returning to work after retirement, or are ready to apply for your retirement now – Retirement Central is your first and last stop for all things retirement at the ASRS.

Written by Pam Foust, Communications and Sara Orozco, Strategic Planning

Published in Expanding Your Financial Horizons digital newsletter May 2019 

 

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