Chapter 6 and Chapter 7: CRPC
Outliving one's resources
Having to work in retirement
Being able to afford healthcare
Being able to cover LTC needs
Staying productive and engaged - ANS-Top concerns of prospective retirees:
Can I afford it?,...
Create a budget
Impact of inflation
Unexpected expenses
Costs in retirement
How will my spouse and family be affected?,...
Everyday is a Saturday
Shared interests with spouse, if not adjustments - ANS-Questions facing prospective
retirees
Is this the right time?
Enjoy work or not?
Personal health?
Emotionally ready vs financially,...
Do I really want to retire?,...
Stay in current home/ downsize?
Hobbies?
Flexible,...not have to go to work
Lose ability to perform up to standards - ANS-More questions facing retirees,...
Defined benefit pension plan - typically benefits are reduced
Defined contribution plan - fewer contributions and fewer years of growth
Social security - benefit reduction if claim early
Health care coverage - costs may increase
Loss of employer covered healthcare
, Retirement plan distributions - must be structured to avoid early withdrawal penalties -
ANS-Factors that Affect the Early Retirement Decision
All plans -
Death or disability
Substantially equal periodic payments
Medical expenses above 10% AGI
IRA Only
First time home purchase up to $10K
Health insurance premiums while unemployed
All except IRA
separation from service after age 55
Qualified domestic relations order (QDROs) do not apply to IRA accounts - ANS-Early
withdrawal penalty exceptions
1) Cash/ severance benefits
2) continued health plan coverage - until hit age of 65 bridge gap to Medicare
3) Early access to distributions from retirement plans - can access at 55 without a 10%
penalty
4) enhance pension benefits - inflate pension benefits artificially, base as if you retired at
a later date
Other benefits
Continued use of co fitness center
Pre-retirement counseling
Tax counseling - ANS-Early retirement incentives
Present Value of benefits gained versus lost
Impact on social security and health benefits - less years OR less of the higher earning
years towards PIA; less contributions to retirement plans
Less time to compound and grow
State of job market - how easy to get another job, same field different company, skill set
declining
Value placed on leisure time - not like what you do, retire on less, live more frugally and
worth it to them - ANS-Is it a good deal? When faced with early retirement
Clauses written into executive contracts that provide special payments to key
executives who might lose their position or be otherwise disadvantaged if another
Outliving one's resources
Having to work in retirement
Being able to afford healthcare
Being able to cover LTC needs
Staying productive and engaged - ANS-Top concerns of prospective retirees:
Can I afford it?,...
Create a budget
Impact of inflation
Unexpected expenses
Costs in retirement
How will my spouse and family be affected?,...
Everyday is a Saturday
Shared interests with spouse, if not adjustments - ANS-Questions facing prospective
retirees
Is this the right time?
Enjoy work or not?
Personal health?
Emotionally ready vs financially,...
Do I really want to retire?,...
Stay in current home/ downsize?
Hobbies?
Flexible,...not have to go to work
Lose ability to perform up to standards - ANS-More questions facing retirees,...
Defined benefit pension plan - typically benefits are reduced
Defined contribution plan - fewer contributions and fewer years of growth
Social security - benefit reduction if claim early
Health care coverage - costs may increase
Loss of employer covered healthcare
, Retirement plan distributions - must be structured to avoid early withdrawal penalties -
ANS-Factors that Affect the Early Retirement Decision
All plans -
Death or disability
Substantially equal periodic payments
Medical expenses above 10% AGI
IRA Only
First time home purchase up to $10K
Health insurance premiums while unemployed
All except IRA
separation from service after age 55
Qualified domestic relations order (QDROs) do not apply to IRA accounts - ANS-Early
withdrawal penalty exceptions
1) Cash/ severance benefits
2) continued health plan coverage - until hit age of 65 bridge gap to Medicare
3) Early access to distributions from retirement plans - can access at 55 without a 10%
penalty
4) enhance pension benefits - inflate pension benefits artificially, base as if you retired at
a later date
Other benefits
Continued use of co fitness center
Pre-retirement counseling
Tax counseling - ANS-Early retirement incentives
Present Value of benefits gained versus lost
Impact on social security and health benefits - less years OR less of the higher earning
years towards PIA; less contributions to retirement plans
Less time to compound and grow
State of job market - how easy to get another job, same field different company, skill set
declining
Value placed on leisure time - not like what you do, retire on less, live more frugally and
worth it to them - ANS-Is it a good deal? When faced with early retirement
Clauses written into executive contracts that provide special payments to key
executives who might lose their position or be otherwise disadvantaged if another
