Thinking about retiring? Now may be an ideal time to consider the plans you've made for this exciting next phase of life and to carefully weigh your options. The following six tips can help you get started.
1. Identify Your Retirement Goals
Although you may have been saving and planning all along for the day when you retire, now is a good time to make a "wish" list. Write down specifically how you want to spend your time, and what you think your needs and preferences will be for housing, health care, travel, charitable involvement and giving, and special events and purchases.
2. Look into Your Retirement Costs
Create a formal budget for retirement to help give you a better idea of your income and expenses. There are a host of online worksheets available, including an interactive budget worksheet from the National Council for Credit Counseling (nfcc.org). Once you've completed your budget, compare your projected retirement expenses to your expected sources of retirement income. If you discover a shortfall, consider increasing your retirement plan contributions and possibly adjusting your plans for retirement to accommodate your budget.
3. Talk with Your Benefits Department
Make an appointment with your benefits department. Explore how the timing of your retirement may impact your pension and/or defined contribution benefits, as well as your health care coverage. You may also want to discuss your options for receiving your retirement savings. For example, you may be able to receive: 1) a guaranteed monthly benefit for life through one of a variety of annuity options1; 2) regular monthly payments as an alternative to using your entire account balance to purchase a guaranteed lifetime annuity; or 3) a single sum payment upon retiring. Keep in mind, Mutual of America's Electronic Funds Transfer (EFT) service provides an easy way for retirees to receive their monthly payments electronically.
4. Check Your Social Security Benefits
If you haven't done so already, find out how much you can expect to receive from Social Security. You can get your current Social Security Statement online at ssa.gov/onlineservices. The website includes a handy Retirement Estimator that provides an estimate of your Social Security benefit amount based on real-time access to your earnings record.
5. Understand Medicare and Review Your Other Insurance Plans
It's important to consider how you will pay for medical expenses in retirement, including possible long-term care needs. For detailed information about Medicare, visit medicare.gov. You should also review any health and life insurance policies you may currently have. If you have health and/or life insurance through your employer, speak to your human resources or benefits department to find out whether you can extend those policies beyond retirement.
6. Maximize Your Retirement Plan Contributions
Finally, consider contributing as much as you can to your retirement savings. If you participate in an employer-sponsored retirement plan, check with your human resources or benefits department to learn if your plan offers an employer match, and if it does, take full advantage of it. That's like getting a raise as incentive for saving for retirement. Depending on the plan you participate in, during 2016 you may be able to contribute up to $18,000 annually, and up to $24,000 if you are age 50 or older.2
1This guarantee is subject to Mutual of America's financial strength and claims-paying ability.
2If you contribute to a TDA, 403(b) Thrift and/or 401(k), the total amount contributed to all plans may not exceed $18,000 ($24,000 to all plans, if age 50 or older) annually.
Before investing, you should carefully consider the investment objectives, risks, charges and expenses of the variable annuity contract and the underlying investment funds. This and other information is contained in the contract prospectus or brochure and underlying funds prospectuses and summary prospectuses. Please read the contract prospectus or brochure and underlying fund prospectuses and summary prospectuses carefully before investing. The contract prospectus or brochure and underlying fund prospectuses and summary prospectuses can be obtained by mail or by calling 1-800-468-3785.
Mutual of America's group and individual retirement products are variable annuity contracts and are suitable for long-term investing, particularly for retirement savings. The value of a variable annuity contract will fluctuate depending on the performance of the Separate Account investment funds you choose. Upon redemption, you could receive more or less than the principal amount invested. A variable annuity contract provides no additional tax-deferred treatment of benefits beyond the treatment provided to any qualified retirement plan or IRA by applicable tax law. You should carefully consider a variable annuity contract's other features before making a decision.