Article

Managing Retirement Decisions Client Education Resources

Betty Meredith, CFA, CFP®, CRC®, Director of Education, and Research, InFRE

By Betty Meredith, CFA®, CFP®, CRC®

The Society of Actuaries’ Committee on Post Retirement Needs and Risks recently completed a significant series of planning briefs to help consumers make more informed retirement decisions.

Drawing upon the expertise of prominent retirement professionals, the result is this thought-provoking series of 11 issue briefs written in everyday language that retirement counselors can use with their clients, retirement system members and/or defined contribution plan participants/employees.

The “Managing Retirement Decisions Series” addresses a variety of retirement decisions with practical considerations and advice. Links to each brief are provided below.

1. Big Question: When Should I Retire?  Key questions to consider, examples showing financial benefits of delaying retirement
   
   • Should I/my spouse start Social Security benefits as soon as possible or delay taking benefits in order to receive higher payments later on?
     
   • How will age-related changes in my/our health affect retirement?
     
   • What financial resources will be available?
     
   • Will the finances be sufficient to last for my/our entire lifetime?
     
   • What will be my family/household needs during retirement?
     
   • How will I/we be able to realize my/our goals and dreams?
     
   • Would it be a financially sound move to delay retirement?
2. When Retirement Comes Too Soon. Dealing with plans turned upside down by unplanned early retirement. Pre-retired unemployed have an urgent need to evaluate the following potential resources:
   
   • Severance pay
     
   • Health insurance
     
   • Unemployment insurance
     
   • Ways to replace income during a job search
     
   • Accessibility of IRA and 401(k) assets
     
   • Income Annuities
     
   • Defined benefit plans

   And tips for minimizing the consequences of unemployment on their retirement security.
   

3. Women Take the Wheel: Destination Retirement. This brief addresses special issues faced by women in retirement.
   
   • Get papers in order
     
   • Figure out how much retirement will cost
     
   • Review the retirement plan
     
   • Evaluate when to start Social Security
     
   • Assessing divorce and other special situations
     
4. Deciding When to Claim Social Security.  A key component of retirement is when to claim Social Security and the impacts. It is critical to understand how benefits vary by claiming age.
   
   • Evaluate the availability of other assets
     
   • Considerations for singles
     
   • Strategies for couples
     
   • Considerations for widows
     
   • Special income tax considerations
     
5. Designing a Monthly Paycheck for Retirement. Replacing a regular paycheck and related options.
   
   • The tradeoffs of different types of income replacement solutions
     
   • Early steps
     
   • Products with lifetime guarantees
     
   • What about the costs?
     
   • The bottom line
     
   • Key questions for retirees
     
6. Treating Asset Allocation Like a Roadmap.  A well thought out asset allocation program is a key ingredient of successful retirement for many Americans. But just what is asset allocation, and what decisions do people need to make regarding asset allocation as they approach and enter retirement?
   
   • First assess risk tolerance
     
   • Rules of thumb help, but….
     
   • Decide on assets classes
     
   • Spot the efficient frontier
     
   • Consider location, location, location
     
   • After retirement starts:
     
     • Rebalancing
       
     • Monitor company stock ownership
       
     • Weight the mutual fund advantage
       
     • Targeted asset allocation – a very personal choice
       
7. Securing Health Insurance for the Retirement Journey.  A look at pre- and post-age 65 retiree insurance choices.
   
   • A frank look at costs
     
   • Special issues for early retirees
     
   • Solutions and options
     
   • Key health plan decisions and actions at retirement
     
   • Healthcare
     
   • The big decision: Medicare
     
   • Areas to explore
     
8. Taking the Long-Term Care Journey. Answers to questions about whether to buy insurance.
   
   • Why be concerned?
     
   • What does it cost?
     
   • Options for paying for long-term care services
     
   • Long-term care insurance basics
     
   • Where to find long-term care insurance
     
   • Key long-term care insurance features
     
   • Deciding whether to buy long-term care insurance
     
9. Where to Live in Retirement. Housing is one of the largest expenses people have in retirement. Housing issues and special elderly housing needs.
   
   • To go or to stay
     
   • Housing communities to consider
     
   • Paying for housing in old age
     
     • Mortgage decisions, refinancing
       
     • Accessing home equity
       
     • Reverse mortgages
       
     • Continuing care retirement communities
       
   • Research, caution and advice
     
10. Estate Planning: Preparing for End of Life. Estate planning considerations and key issues.
    
    • Wills and trusts
      
    • Powers of attorney and health care proxies
      
    • Avoiding probate
      
    • Leaving detailed information
      
11. Finding Trustworthy Financial Advice for Retirement and Avoiding Pitfalls. Unfortunately, finding trustworthy advice is not always easy. Avoid the pitfalls of seeking financial advice.
    
    • What to avoid
      
    • Finding a good advisor
      
    • Understanding expense charges
      
    • The dark side – various types of financial wrongdoing
      
    • Guidelines for complaints
      

If you’d like to make any or all of these briefs available to your clients or plan participants, please contact Steve Siegel, Research Actuary at ssiegel@soa.org and let him know you found learned about these through InFRE!