From Kiplinger · · 1m 50s
Retirement Decisions for the First Year
Five key financial choices to make in your first year of retirement.
In brief
Five key financial choices to make in your first year of retirement. Retirees should decide where retirement income comes from, manage new tax routines, time Social Security claims, cover healthcare, and prepare for market downturns. Originally reported by Kiplinger.
Where retirement income comes from
Retirees must decide where monthly income comes from after leaving work.
Tax routine adjustments
Retirees face new tax rules with multiple income sources and withholding options.
Social Security claiming timing
Retirees must choose when to claim Social Security benefits to maximize income.
Healthcare coverage options
Retirees need coverage before Medicare starts, including COBRA or marketplace plans.
Market downturn preparedness
Retirees should plan for sequence of returns risk during market declines.
First-year financial review
Retirees compare actual spending with plans and adjust tax and withdrawal strategies.
Tax credits and healthcare costs
Marketplace health insurance premiums depend on retirement income and tax credits.
Social Security benefits
Claiming Social Security early reduces monthly benefits but can lower future tax burdens.
Medicare enrollment
Retirees must enroll in Medicare during the initial seven-month period to avoid penalties.
Roth conversions
Roth conversions can reduce future required minimum distributions and tax burdens.
Health savings accounts
Health savings accounts can cover qualified medical expenses for retirees.
Withdrawal strategy impact
Withdrawals from different accounts affect tax consequences and portfolio longevity.
Market sequence risk
Poor returns early in retirement can be especially damaging with ongoing withdrawals.
First-year review
Retirees should compare actual spending with plans and adjust strategies accordingly.
Social Security delay benefits
Delaying Social Security claims increases monthly benefits but requires careful planning.
Healthcare costs
Retirees must track healthcare costs to ensure they fit within retirement budgets.
In short
Retirees should decide where retirement income comes from, manage new tax routines, time Social Security claims, cover healthcare, and prepare for market downturns.
