As you plan to retire, it’s a good idea to brush up on important information you’ll need to make the most of the money set aside in retirement accounts, how Medicare works and what you can expect in Social Security benefits.
There are key milestones that can make a significant impact on your retirement tax implications. Once you are 59 1/2, you are no longer subject to the 10% early-withdrawal penalty from your IRA or 401(k). At age 72, you will be required to take minimum distributions from traditional IRAs and 401(k). Just because you are required to take a minimum distribution from your traditional IRAs or 401(k) plan, you don’t have to spend the money. You can invest into stocks or a Roth IRA.
Excelligence generally recognizes normal retirement age as 65. Excelligence also recognizes certain definitions of “Early Retirement” in some of its benefit plans, however, Excelligence does not have an Early Retirement Program; this is solely used as reference to a specified number of years of service and age that meet certain requirements under our benefit plans.
Retirement is considered one form of resignation, and therefore, our normal resignation policies do apply regarding notifications.
NOTE: When calculating “years of service”, one must always refer to the “continuous service date” in (Company HRIS System). This is the date that encompasses the total accumulation of service including prior service for rehires and those involved in acquisitions. NO OTHER DEFINITION/FIELD MAY BE USED.
To help you transition into the new retired stage of life, we have compiled a resource, with key information to help you know what to expect.
Your age when you collect Social Security has a big impact on the amount of money you ultimately get from the program. The key age to know is your full retirement age. For people born between 1943 and 1954, full retirement age is 66. It gradually climbs toward 67 if your birthday falls between 1955 and 1959. For those born in 1960 or later, full retirement age is 67. You can collect Social Security as soon as you turn 62, but taking benefits before full retirement age results in a permanent reduction — as much as 25.83% of your benefit if your full retirement age is 66. Click Here for more information.
Medicare is a federal health insurance program that covers medical services and supplies in hospitals, doctors’ offices and other health care settings. You qualify for Medicare if you are age 65 or older.* Medicare has four components:**
Part A: Hospital Insurance
Part B: Medical Insurance
Part C: Medicare Advantage Plans
Part D: Prescription Drug Coverage
If you are collecting Social Security benefits at least four months before turning 65, then you are automatically enrolled in Medicare Parts A and B.
If you are within three months of turning 65 and not collecting Social Security benefits, you must enroll in Medicare one of three ways:
Online: www.socialsecurity.gov/retirement
Phone: 800-772-1213
In person: your local Social Security office
| You have three opportunities to enroll in Medicare | ||
|---|---|---|
| Definition | When Coverage Begins | |
| Initial Enrollment Period | 7 months, starting three months before you turn 65, the month of your birthdayand ending three months after the month you turn 65 | First of the month you turn 65*** |
| General Enrollment Period | January 1 - March 31 | July 1 |
| Special Enrollment Period | 60 days after group health plan coverage ends | First of the month following month you enroll in Medicare |
In that case, you may delay enrolling in Medicare without paying a penalty if your employer is registered as having over 20 employees. If you do enroll in Medicare while on your employer’s or spouse’s group health plan, your employer-based plan will generally pay first for any health care services you receive if your employer plan is an over 20 registered plan. If your employer is less than 20 registered, you MUST have Medicare.
If your employer is registered with having over 20 employees AND your enrolled plan is NOT Medicare Creditable for prescription coverage, you will owe a penalty.
For detailed information on Medicare and its many components, visit www.medicare.gov.
To find a Social Security office near you, go to www.ssa.gov/locator.
To sign up for and explore your Parts C and D options, log on to www.medicare.gov, hover your mouse over “Sign Up/Change Plans” and click on “Find health & drug plans.”
If you have a health savings account (HSA), all contributions must stop once you enroll in Medicare. However, you may continue to use existing funds to help cover qualified out-of-pocket health care expenses, including premiums for Medicare Parts A, B, C and D.
If your spouse is covered as a dependent under your group health plan and he/she enrolls in Medicare, you may continue to contribute to your HSA, as long as you are not enrolled in Medicare.
Note: If you enroll in Medicare midyear, all HSA contributions will be prorated up to the annual IRS maximum.
| If she enrolls… | Coverage begins… |
|---|---|
| Initial Enrollment Period | |
| Between February and August | May 1* |
| General Enrollment Period | |
| Between January and March of the following year | July 31 |
| Special Enrollment Period | |
| Within 8 months following her loss of coverage through her employer or termination of employment | The first of the month following the month she enrolls in coverage (e.g., if she enrolls May 15, coverage begins June 1) |
*Or are under age 65 with certain disabilities or have end-stage renal disease.
**Medicare Supplement Plans (Medigap) provided by private health insurance are also available.
***Unless your birthday is the first of the month, in which case coverage starts the first of the month before you turn 65.
