Its never too late to start a retirement plan!

Here are five questions or decisions just about every retiree needs to confront.

1. When should I start taking Social Security benefits?

There's a natural inclination to start taking Social Security as soon as the rules allow, at age 62. But taking Social Security before your full retirement age will result in a permanent reduction in benefits. In contrast, if you delay beyond full retirement age, you get a credit in the form of a larger payout.

The math, needless to say, is complicated. One resource that can help is a new calculator from AARP. (http://www.aarp.org/work/social-security/social-security-benefits-calculator/?cmp= RDRCT-SOCI_JUNE15_011).  With just a few pieces of information, this tool creates an easy-to-read chart on the best time to start taking Social Security.

Two other sites to consider: Analyze Now, which offers a Social Security Planner – (http://www.analyzenow.com/Free Programs/free_programs.htm), and Charles Schwab & Co., which has a guide to "timing" benefits – (http://www.schwab.com/public/schwab/ research_strategies/market_insight/retirement_strategies/planning/when_should_you_take_social_security.html).  Search for "Social Security." (Are you saving enough for retirement? Check MSN Money's calculator – (http://money.msn.com/retirement/retirement-calculator.aspx.)

2. Should I get a part-time job?

For many retirees, nest eggs aren't lasting as long as anticipated, thanks to a lousy stock market, low interest rates and falling home values. That's prompting retirees to look for work. But a difficult job market makes it hard to get in the door.

For some workers, a part-time job may be the answer. The longer you can defer tapping savings, the more time your nest egg -- ideally -- has to grow. Plus, says Allan Roth, a financial planner in Colorado Springs, "when you're working, you have less time to spend money." There also may be a psychological benefit for those who might find it hard to adjust to retiring. Part-time work "gets you to an unstructured lifestyle in an incremental manner rather than all at once," Roth says.

3. Where should I keep my money?

And how should I take it out? For people with a 401k retirement-savings plan, inertia may result in simply leaving the money with the same money manager that runs a former employer's plan. If that plan involves a low-cost fund company with a wide variety of investment options, such as Vanguard Group, it may not be a bad idea.

But for many people, especially those who worked at companies where 401k expenses are high, it could be a waste of money. An easy way to put money back in your pocket is to roll over your savings to an individual retirement account at a discount brokerage, with the aim of getting lower expenses and greater diversification.

Then, as part of a financial plan and budgeting process, you can save money on taxes depending on the order in which you tap your various investments. Always work with an accountant on tax questions, but the rule of thumb is to first withdraw money from taxable accounts, reducing future tax bills. Next come tax-deferred individual retirement accounts, where at age 70½ you'll start taking required minimum distributions. (Will your 401k provide enough? Run the numbers with MSN Money's calculator – (http://money.msn.com/ retirement/401k-calculator.aspx.)

Roth IRAs make a tempting source to tap first, because you don't pay taxes on withdrawals. "Some people automatically go to the Roth IRA but . . . that should be the last thing you touch, because that money can grow tax-free," says Michael Sadoff, a financial adviser at Sadoff Investment Management in Milwaukee. (Should you convert to a Roth IRA? Check here – (http://money.msn.com/retirement/roth-ira-conversion-calculator.aspx.)

4. Should I pay off the mortgage?

Paying off a mortgage used to be a major financial goal. Then came the 1990s bull market in stocks and last decade's real-estate boom. Financial advisers began telling clients they'd be better off using their money to invest in stocks and allow rising home prices to reduce the size of a mortgage relative to the equity in the house.

Now, many seniors are saddled with mortgages for more than their houses are worth, thanks to the collapse of the real-estate market. Still, there's a calculation to be made. How much of a nest egg will paying off the mortgage eat up? Houses aren't liquid investments that can serve as a source of emergency cash.

Also, how does the interest rate on the mortgage compare with what can be earned on a safe investment? Today, that balance tilts in favor of paying off a mortgage, says Roth. "If their mortgage is costing them 5% and they've got a Treasury bond paying 2.6%, then they ought to pay off the mortgage."

5. Who will make decisions for me when I no longer can?

It's never pleasant to contemplate the final stages of life. But doing so is crucial to making a difficult time for loved ones easier.

Retirement is a good time to make sure a will is up to date. But there are other important questions, in the event you can no longer make decisions for yourself -- including giving someone power of attorney to handle business and financial questions and naming a health-care proxy.

It's important to give these questions a lot of thought. For instance, does the person you grant power of attorney to live nearby so it's easy to sign documents? When it comes to a health-care proxy, he urges discussing your wishes with the person you name to be sure he or she will be emotionally able to carry them out.

6. Am I saving enough for retirement?  (http://money.msn.com/retirement/retirement-calculator.aspx)

 

Take the quiz -  One method of retirement planning is to project what you are currently saving, add it to what you have accumulated to date, and see if you will have enough to meet your retirement objectives. Use this calculator to determine whether your money will run out during retirement or last you.



Now That You’re 65 – 10 Things You Need to Know

The oldest of the nation’s baby boomers, those born in 1946, start turning 65 this year. For people who grew up with the Mickey Mouse Club and the Lone Ranger, the thought of getting involved with the Social Security Administration might be hard to swallow, but it is about to happen to you. This article will be your primer for what you need to do, now that you are 65. Note: The government’s Social Security and Medicare websites are first rate and very helpful. We have used much of their information in the sections below, and provided links as well.

1. Register for Medicare to start your health care coverage
Medicare is a Health Insurance Program for people age 65 or older, some disabled people under age 65, and people of all ages with End-Stage Renal Disease. Sign up three months before the month you turn 65 to insure that coverage begins on the first day of your birth month. Don’t wait until your birth month to apply or you might experience coverage delays. To apply, visit your local Social Security office or call Social Security at 1-800-772-1213. You can apply online (using the Internet) if you meet certain rules. To apply online, visit www.socialsecurity.gov. You cannot apply online if you want to enroll in Medicare but not start your Social Security payments.

2. Decide about Part B insurance
Even if you keep working after you turn 65, you should sign up for Medicare Part A. If you have health coverage through your employer or union, Part A may still help pay some of the costs not covered by your group health plan. However, you may want to wait to sign up for Medicare Part B if you or your spouse are working and have group health coverage, because you will be paying the premium for coverage you are probably already getting.

3. Decide about a Medicare Advantage Plan (Part C).
A Medicare Advantage Plan (like an HMO or PPO) is another Medicare health plan choice you may have as part of Medicare. Medicare Advantage Plans, sometimes called “Part C” or “MA Plans,” are offered by private companies approved by Medicare. If you join a Medicare Advantage Plan, the plan will provide all of your Part A (Hospital Insurance) and Part B (Medical Insurance) coverage. Medicare Advantage Plans may offer extra coverage, such as vision, hearing, dental, and/or health and wellness programs. Most include Medicare prescription drug coverage (Part D).

4. Part D – Medicare Prescription Drug Coverage Decision
Medicare prescription drug coverage is insurance run by an insurance company or other private company approved by Medicare. There are two ways to get Medicare prescription drug coverage:

1. Medicare Prescription Drug Plans. These plans (sometimes called “PDPs”) add drug coverage to Original Medicare, some Medicare Cost Plans, some Medicare Private Fee-for-Service (PFFS) Plans, and Medicare Medical Savings Account (MSA) Plans.

2. Medicare Advantage Plans (like an HMO or PPO) are other Medicare health plans that offer Medicare prescription drug coverage. You get all of your Part A and Part B coverage, and prescription drug coverage (Part D), through these plans. Medicare Advantage Plans with prescription drug coverage are sometimes called “MA-PDs.”

Important: If you decide not to join a Medicare drug plan when you’re first eligible, and you don’t have other credible prescription drug coverage, you will likely pay a late enrollment penalty.

Finding a Medicare Drug Plan:
The Medicare Drug Plan Finder (https://www.medicare.gov/find-a-plan/(X(1)S(2jyucdylcbdyla55lhw1fm55))/questions/home.aspx?AspxAutoDetectCookieSupport=1) can help you find and compare plans in your area.

Costs of Part B: Your Part D monthly premium could change based on your income. Many people qualify to get extra help paying their Medicare prescription drug costs but don’t know it. Most who qualify and join a Medicare drug plan will get 95% of their costs covered. You must have Medicare Part A or Part B to get Part D coverage. See Medicare Part D (http://www.medicare.gov/navigation/medicare-basics/medicare-benefits/part-d.aspx) for more details.

5. Decide when you want to start receiving social security.
If you have started taking your benefits this question doesn’t apply. For people born between 1943 and 1954, your full retirement age is 66. If you were in born in 1946 and elect to start receiving your benefits this year, you will get 93.3% of the monthly benefit you would receive if you waited until age 66. If you delay taking benefits even longer (until a maximum of age 70), you will receive 8% more for each year you wait.

When to start taking your benefits is an important question with many different factors and conflicting opinions. If you live to the average life expectancy it probably doesn’t make any difference when you start – if you start early you will get less over a longer time, and if you start later you get more for a shorter time. If you continue working your benefits can be reduced – in 2010 if you were under your full retirement age, for every $2 over the $14,160 limit, $1 is withheld from benefits. In the year you reach full retirement age the limit goes to $37,681; then for every $3 over the limit there is a benefit reduction of $1. After that you can make as much as you want and see no reduction in benefits.

If you live longer than the average life expectancy you would probably earn more if you started your benefits later. When to Start Receiving Retirement Benefits from the Social Security Administration is very helpful; so is “A Surprising Answer as to When to Start Taking Social Security Benefits” from Topretirements.com. Here’s where you can apply for Social Security.

6. Save more money for retirement
if you are working, it’s never too late to save more for your retirement (and shield it from taxation until at least age 70 and 1/2). For example, if you are over age 50 you can contribute $6,000 to your IRA (until the year you reach 70.5). You might also be able to contribute to a 401k, Roth IRA, or SEP. Contact your tax professional to find out what might apply in your situation.

7. Decide where you are going to retire
Even if you are not going to retire for a few more years, it is not too early to start planning. Make a list of your primary considerations (our “Baby Boomers Guide to Selecting a Retirement Community” is a great resource”). Take the Retirement Ranger Quiz to help identify likely towns and communities. Then start visiting different places – either on special trips or tacked on to your other travel. Take advantage of “Stay and Play” packages – there is no better way to evaluate a place than to stay there for a while.

8. Write out your bucket list
Take retirement by the throat – this is your chance to do anything you want. Spend some time and write out the list of things you want to accomplish in the rest of your life. 

9. Take responsibility for your own retirement
In a recent PBS show, “Will Baby Boomer Retirements Strain U.S. Resources“, Judy Woodruff interviewed 2 experts about baby boomers’ impact on retirement. Ted Fishman, who wrote “Shock of Gray” talked about the impact of having fewer than ever workers support a huge number of retired boomers. Nicholas Eberstadt of the American Enterprise Institute urged boomers to take charge of their finances, since most haven’t saved enough, and many had to retire earlier than planned. He urged boomers to ask pro-active questions like: “How do I improve my skills so I can work longer and save more money.”

10. Start taking your senior citizen discounts
Sure it hurts to be getting older. But for those of us with a little Scotch ancestry, saving 10-15% every time we buy a movie ticket, cup of coffee, or ski pass might help take the sting out of it.