Retirement Benefits Overview
Whether years away or just around the corner, planning for retirement throughout one’s life is an essential and ongoing process. Retirement plans and benefits come in many shapes and sizes that, when properly structured, cater to the retiree’s needs. When considering your own retirement, you’ll want to pay close attention to which benefits programs are best for you and your dependents.
Retirement benefits can accrue in any number of ways through many different plans. This article explores some of the more common plans and benefits, such as IRAs and 401k plans, as well as programs provided by the United States government, such as Medicare and Social Security.
A well-organized retirement plan is key to establishing a sustainable retirement income, but the retirement system is vast and ever-changing. The first step often involves educating yourself on this complex area of older adult law. When it comes to financial security, there’s no better way to learn than by speaking with dedicated experts:
- If you’re seeking guidance on your own retirement options, it’s never too early to speak with an older adult law attorney about your retirement.
- Retirement plans often involve matters of estate planning. Consider speaking with an estate planning expert to incorporate your benefits program into future planning.
- Additionally, low-cost do-it-yourself (DIY) estate planning is possible in some simple cases and can be found on our companion site, FindLaw.com.
Retirement benefits are one of the most critical aspects job seekers must look at when weighing job offers. “Retirement benefits” is an umbrella term that refers to any benefits an aspiring or recent retiree saves for and later confers subject to reaching their retirement age. This term often refers to the financial support that accumulates and later flows out of a retirement plan.
This financial support can include monthly benefits, one lump sum of your retirement savings, payments out of a pension plan, and other less common options. Retirement benefits vary due to a variety of factors, including:
- The plans and benefits offered through employers, financial institutions such as banks and investment firms, life insurance companies, mutual funds, etc.
- The amount of retirement savings you dedicate to your plan throughout your career
- The amount you are calculated to receive in Social Security retirement benefits
- Retirement age
A defined benefit plan should extend beyond the workplace, incorporating health care and wellness. Long-term health benefits and government programs such as social security retirement benefits are also commonplace. While there is no “one-size-fits-all” approach to retirement planning, the right strategy and proper vesting can provide sustainable income once your career has ended.
As mentioned above, retirement plans and the benefits that flow out of them can take many forms. Every retirement plan will be affected by factors such as your line of work, your employee benefits, full-time or part-time employment, career longevity, and sustained financial stability.
This list is a base introduction to the many different retirement benefits available to retirees and is not intended as comprehensive. Speak to an older adult law attorney to learn about the best options available. In the meantime, here are some standard plans worth familiarizing yourself with:
- Individual Retirement Arrangement (IRAs) – A traditional IRA allows a retiree to make tax-deferred investments to their plan. There are many different types of IRAs, so make sure you’re informed before you select one that meets your needs. For example, Roth IRAs offer tax advantages on certain qualified distributions, while other distributions are not tax deductible. Depending on your finances, there may be more savings through a Roth versus a tradition. The Internal Revenue Service (IRS) website breaks down several types of IRAs.
- 401k – 401k plans are a popular benefit offering from “for-profit” employers. Employees electing a 401k can contribute their earnings to an account balance while the company matches all or a predetermined percentage of that contribution. The two main types here are traditional or Roth 401ks. In a traditional 401k, an employee’s contributions are not taxed until they make withdrawals. This differs from a Roth 401k, where employees pay taxes on their contributions up front while being able to make tax-free withdrawals. The IRS.gov website provides additional information on establishing a 401k.
- IRC 403(b) Tax-Sheltered Annuity – The IRC 403(b) works similarly to the 401k but for non-profit employers. Public school teachers and qualifying non-profits allow employees to build retirement savings through these plans.
- Social Security Retirement Benefits – Social Security benefits are derived from the United States government’s Old Age, Survivors, Disability Insurance (OASDI) program. You’re likely familiar with Social Security taxes if you’ve received a paycheck in the U.S.. These taxes are then repurposed as benefits to retirees and people with disabilities. Children, spouses, and survivors of the beneficiaries can also sometimes receive these benefits.
- Medicare – Like Social Security, this is a tax-funded insurance program provided by the federal government. The U.S. Centers for Medicare and Medicaid Services (CMS) agency oversees this health insurance program. Enrollment is available to Americans 65 or older and people with disabilities. Visit the federal government’s Medicare webpage for more information.
These are just a few of the most prominent benefit plans Americans must consider when finalizing their retirement plans. Consider speaking with an attorney for a comprehensive deep-dive into the plans available in your financial situation.
Planning for retirement is a marathon, not a sprint. After all, you deserve to be well-compensated for your years of service. Therefore, consulting with multiple legal and financial experts throughout your career is wise to ensure your financial needs are met.
An older adult law attorney can advise you on how to best navigate the retirement system, even providing pointers on retirement age or which questions to ask your human resources department.
A well-maintained retirement plan can often involve multiple parties, such as eligible dependents or beneficiaries. In addition to an older adult care attorney, and depending on your circumstances, you should also speak with attorneys experienced in family law and estate planning.