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Do you know how to retire?
We dream and plan for retirement, and save up as much money as we can. Yet once it’s time to separate from our employer, we may react like a deer frozen by an oncoming car’s headlights.
How prepared are you to get through the process of actually retiring? Are you aware of creative things you can do just prior to pulling the plug on your job that will boost your retirement income? Have you prepared for an economic downturn or recession?
As a social worker, I realize the process of retiring can be overwhelming. There are all kinds of decisions to make. You have to choose appropriate survivor benefits. Or, you may be weighing whether or not to delay claiming Social Security benefits.
It’s easy to make a costly mistake.
Table of Contents
How do you learn how to retire?
Look for a mentor to learn how to retire the right way.
My supervisor is about to retire, and we recently had our last supervision meeting. I quickly covered all the areas we usually talk about.
Something much bigger was weighing on my mind, however.
What I really wanted to talk about was her experience with the retirement process. Not the usual things, such as “identify your retirement savings number” or “have a plan for what you will do in retirement.”
Get the inside scoop before you start the retirement process.
I wanted to know how to retire from my government job. The low-down, nitty gritty details were what I was after!
My supervisor will be gone soon, and I saw this as a great chance to learn what I should expect when I’m ready to retire.
These are the things no one ever really tells you about. Each employee is left to figure out how to retire for themselves.
Oh, sure, there is an HR department with retirement applications and timelines. There’s even an employees’ retirement association that offers a class outlining the retirement process . . . in a general way.
Get hands-on help if you need a little more guidance.
It’s so much nicer to have someone give you a little one-on-one direction, if you need it.
So, I told my supervisor I wanted her to tell me all the things I’d need to know about how to retire from our agency. I asked about what she had to learn through trial and error.
I asked her how she found her footing on the path to retirement. This is what she told me about how to retire.
A Proper Timeline For How To Retire:
What To Do Right Now – Educate Yourself
- Sign-up for AARP. Great benefits and educational resources!
- Create an online account on the employee retirement association’s website.
- Start reading books about Medicare, Social Security, and your rights.
- Track the employee retirement association website and save all statements.
2 To 5 Years Before Retirement
If you have a class that can help you get through the planning stages, sign up! Take any retirement planning classes offered by your employee retirement association that can help you prepare for retirement.
Our employee retirement association offers classes to help employees get ready to retire. The class gives general instructions for completing the retirement application. Required documents (birth & marriage certificates, etc.) are listed.
One Year Before Retirement
Start hoarding sick time!
The year before I plan to retire, my supervisor advised me to begin to bank my sick time. At my job, there are no limits on the number of sick hours I can accumulate. If I don’t use my sick time, the hours keep growing.
Unused sick time can be added to my service credit at retirement. This creative tip will help to increase my pension!
Sick time is a benefit for employees and I’m grateful to have it. However, I eat healthy, move my body, and manage stress. I use herbs to stay healthy. It’s nice to know I won’t lose my sick time benefit by having a healthy lifestyle.
Vacation time is another story. My vacation hours can’t exceed 280 hours. Once I start to accrue over 280 hours, I’ll lose those hours forever. So I make sure to use my vacation time.
I always use all of my vacation time! It’s important to take a break and recharge.
Six Months Or Less Before Retirement
Give Advance Notice of Your Retirement six months or less before you plan to retire.
When getting ready to leave any position, professional etiquette requires that you give notice to your employer. It’s very helpful to let managers know your pending retirement date, even if it is months away.
In my case, I would need to write a letter to the Program Manager as well as the Assistant Division Director, to advise them of my planned retirement date.
It’s a nice touch to include a personal sentiment about the job. Be sure to thank managers for their leadership and guidance. Leave on good terms!
Coordinating Medicare With Employer Retirement Health Benefits
My supervisor is 65 years old, so she is eligible for Medicare. She said it was a challenge to coordinate Medicare Part A, B, and D with the retirement health benefits from our job that are handled by HR.
Medicare Part A and B covers only 80% of healthcare costs, so I will have to research and apply for a supplemental insurance policy to cover the gap.
To make it even more complicated, the rest of our retirement benefits are handled by the employee retirement association. These include pension, deferred compensation, and vision benefits.
60 Days Before Retirement
Submit Letter of Intent to Retire with the Employee Retirement Association is something I’ll need to do when I plan to retire. Make sure you know what paperwork you will need to file for retirement.
The employee retirement association will only accept this letter 60 days ahead of time, no earlier. Once I’ve submitted my letter, I’ll receive an email application. I will select vision and medical benefits. I’ll also learn the details about:
- my last paycheck
- how long I’ll have regular health insurance
- when to expect my first retirement check
After receiving my letter, the employee retirement association will communicate with HR, who will send me another retirement application. I’ll have to fill out two retirement applications!
Final Thoughts On How To Retire
There are a few other areas I will need to address as I learn how to retire. I’ll have to deal with any unused vacation hours and arrange for my last paycheck.
(Knowledge is power but I’m still working on catching up my retirement savings – I’m not retiring yet!)
Updates to come as I learn more about how to retire!
Although these steps are specific to my job, many of you may have to jump through similar hoops to retire. Please share your “how to retire” experiences in the comments!
Very good writeup. I enjoyed reading it.
Thank you, Ovyay! I’m so glad you stopped by! Appreciate your comments.
It’s great that you have the resources of the employee retirement association to help you out when the time for retirement comes. Another resource out there for people are hourly financial planners like you can find on the Garrett Planning Network site. It can be well worth the money to coordinate the various elements and create a retirement plan. Keep the blogging going!
Thanks for your thoughts, Andrew!
This post is really about the process of retiring and all the benefit decisions and associated paperwork to be aware of when getting ready to leave a job. Rather than the financial planning aspects of saving for retirement, which would be done much earlier.
My employee retirement association doesn’t offer any guidance in how much to save, or where to save it. Luckily, I stumbled across the Financial Independence / Retire Early (FIRE) community and discovered it’s not that hard to figure out!
Many other FIRE bloggers have paved the way before me. I’ve been blown away by the support & guidance of other FIRE bloggers and visitors who have taken the time to comment and connect on this blog. It enriches us all.
I don’t think I’ll ever be in a position where I can retire, I’ve been on sick benefits for so long that it seems like an impossible idea that I’ll be able to retire and live well
Sorry to hear about your struggle, Unwanted Life. You’re in the UK, right? I wonder how much the systems between our two countries differ. You’re receiving sick benefits? That sounds similar to the disability benefits we have here. They don’t replace the full salary, but do help out. Are you planning to go back to work at some point? It sounds like you are, since you mentioned you don’t think you’ll be in a position to retire. Hopefully, if you go back to work, you’ll be able to make more than you’re receiving now on sick benefits.
I agree, it’s key to save for retirement, but no one really puts it out there how to manage the transition or what details need looking at. I appreciate the planning points you’ve made! Now I’ve got a jumping off point. Thank you so much! Great post.
–Sue
http://www.susanberkkoch.com/blog
Thank you, Sue! Glad to hear this was helpful to you. There is a lot that goes into the actual retirement process and separating from a job. It’s good to explore the details as we get closer.
Really great article, full of really good information!
Thank you, Andrea! Looking forward to putting it into action at some point in the future, haha.
Great post! There’s so much to think about and do before you retire but now I’m more prepared for when I retired (hopefully in the next 4 decades lol)
You will be way ahead of the game, JoJo! The best thing you can do now is to keep putting money into your retirement or IRA accounts. Since you have a way to go before you said you plan to retire, you’ve got a lot of time for compound interest to work it’s magic for you.