PROGRAMS FOR A MORE COMFORTABLE RETIREMENT

Surveys show that many soon-to-be retired persons have not taken sufficient steps to ensure that their post-retirement years will be financially secure. Here are some tips that may help you make your retired years more comfortable.

Reaping All The Benefits
The first step in preparing for retirement is to make sure that you receive all the benefits to which you are entitled. While U.S. government programs generally can't support the full weight of a retiree’s financial needs, they can help lighten the load. The government programs mentioned below are carefully regulated and have specific qualification requirements. For help understanding any federally-funded program, it’s a good idea to speak to an appropriate government agency or a professional advisor who is familiar with these programs.

1. Supplemental Security Income (SSI) provides a monthly income to those who are living below the government's specified poverty level. Benefits from SSI are dependent on need, rather on earnings or contributions into the Social Security system.
2. Disability. To be eligible for government disability, an individual must have paid into the Social Security system, and be disabled to the point of being prevented from employment for at least a year. Widows, widowers and surviving divorced spouses of may also be entitled to disability benefits.
   
3. Medicare is a federal program that provides limited health coverage to qualified enrollees age 65 or over.
   
4. Medicaid is a federally created, state-run program that covers a wide range of medical expenses, including some—such as nursing home or in-home custodial care—that are not covered by Medicare,
   

Pension Plans
There are several types of pension plans, such as pension, profit-sharing, Employee Stock Ownership (ESOPs) and 401(k) plans. Benefit amounts depend on factors such as the plan structure, your length of service, contributions made by you and your employer, the return generated by the plan’s investments and any loans and withdrawals you have previously made from the plan. Some plans pay the retiree monthly benefits for life, while others provide only a single lump sum benefit at retirement, which the retiree must then invest in the hopes of generating ongoing income. Therefore, some pensioners receive income payments that replace a large percentage of their average salary, while others can barely pay off the mortgage.

Before you begin collecting from a pension plan, seriously consider how and when to receive those funds. Those eligible for a lump sum distribution might want to consider delaying receipt of all or part of the payment for tax purposes or having the distribution transferred directly into an annuity policy or other tax-deferred instrument. Those in higher tax brackets often divert payments to a trust or to tax-favored investment vehicles.