My Retirement Checklist (Part 3)

Last week we discussed how to evaluate whether your investment and tax plan are optimized to be working toward your retirement income goals. In the final part of my Retirement Checklist series, we will discuss how to make sure you’re making cost-effective decisions about Medicare and other insurance, and evaluating the best Social Security strategy for yourself.

 (1) Income and Expenses

(2) Investments & Taxes

(3) Insurance & Social Security

Health Insurance & Medicare

☐ See if your employer provides any retiree health plan or benefits.

☐ If applicable, decide what private health plan to get before Medicare age. 

☐ Decide whether to get a Medicare Advantage plan or Original Medicare.

☐ If getting Original Medicare, decide if you want a Medicare supplemental plan, and if so, what type to get. Include the cost of this in your budget.

☐ If getting Original Medicare, decide what Medicare prescription drug plan you need based on current or expected medication. This is known as Part D.

☐ Calculate the premiums you will pay for Part B and Part D based on your income and include the cost in your budget. This is typically based on your income from 2 years ago. For 2021 premiums, if your 2019 income was over roughly $176,000 (married jointly) or $88,000 (single), you are subject to higher premiums.

☐ Using the example above, if your 2019 was higher than you expect it to be in going forward, you can appeal the premium on form SSA-44 and select the “Work Stoppage” or “Work Reduction” box.

☐ Calculate how much to set aside for out-of-pocket health care expenses and include them in your budget. 

Life Insurance

☐ Take inventory of all of your life insurance policies. What is the death benefit? When do they expire if applicable? What is the monthly cost?

☐ Do a life insurance analysis and determine whether you still need the policies or if you are self-insured.

☐ If you have cash value policies and don’t need them, calculate the tax consequences of cashing them out and determine the best tax year to do that in.

Long Term Care Plan

☐ Determine if you have adequate long-term care insurance to cover potential costs later in life?

☐ If don’t have long-term care insurance, create a long-term plan. This could include using home equity or preserving part of your nest egg for these expenses later in life – or moving in with the kids…just check with them first!

Social Security

☐ Using your benefit estimate from SSA.gov, create a Social Security strategy for when to start benefits based on family longevity, income sources, and taxes. 

☐ If taking benefits before full retirement age and while working, make sure your benefits won’t be reduced due to the earnings test.

☐ If filing for Social Security benefits now, complete form W-4V to have Federal taxes withheld from your benefit.

If you would like the full retirement checklist, with parts 1-3 combined, please click here.

Thank you for reading,

Alex

This blog post is not advice. Please read disclaimers.