How To Retire At 65: 4 Retirement Decisions You’ll Need To Make

As a CRNA, you’ve worked hard throughout your schooling and career. When time flies, you may not even realize that retirement is right around the corner. While some CRNAs may choose to work longer or freelance in their 60s, others want to achieve the retirement dream at age 65.

In order to retire at 65, there are a number of decisions you’ll need to make. If you’re approaching your 60s, now is a good time to start planning for four important retirement decisions.

1. How Will I Cover Healthcare Costs?

Medicare benefits begin at age 65, which is why so many people choose to retire at this age. For many people, Medicare won’t cover all of their medical needs, which is why you’ll need to review and understand your supplemental insurance options, namely a Medigap policy or a Medicare Advantage plan.

Medicare Advantage is a part of Medicare that allows private insurance companies to provide coverage. With this coverage, your Medicare acts like an HMO or PPO because you receive the coverage of Part A and B through private insurance companies approved by Medicare. Many people elect to use Medicare Advantage because the plans may offer more benefits and lower total out-of-pocket costs. There is also Prescription Drug Coverage, which helps cover the cost of prescription drugs and is administered by private insurance companies approved by Medicare.

2. When Should I Apply for Social Security?

Once you hit age 62, you are eligible to begin receiving Social Security retirement benefits. The caveat is that the age you file for the benefits will affect the amount that you receive. Social Security benefits are calculated using complex actuarial equations based on life expectancy and estimated rates of return.

Deciding the best time for you to claim your benefits depends upon how you compare to the averages. As of today, a man turning 65 is expected to live until age 84.3 and a woman of 65 until age 86.6. If based on your health and your family history of longevity, you believe you will live much longer than that, your overall lifetime benefit will be greater if you delay claiming your benefits to increase your benefit amount. If the opposite is true, and you see little chance of making it into your mid 80’s, you would receive a greater lifetime benefit by taking it sooner, even though it is a smaller monthly payment.

Several helpful calculators are available on the Social Security Administration website. With the Retirement Estimator at www.socialsecurity.gov/estimator, most people can receive an estimate of their benefit based on their actual earnings record and manipulate the numbers to reflect different strategies. This may help you decide if and for how long you should delay receiving your benefits.

3. Should I Consolidate My IRAs?

You likely have money saved in a retirement plan, like a 401(k). When it comes time to retire, you’ll need to decide if it makes sense to roll it over to an IRA. If you have multiple retirement plans, it may be beneficial to roll all of them to one IRA. IRAs usually offer more options as to who you can name as a beneficiary or contingent beneficiary of the account. And with all of your money in one place, it may be easier to see the big picture of where you stand financially and manage your asset mix.

An important factor to consider when taking steps to roll your 401(k) balances into an IRA is that of taxes. Funds contributed to a 401(k) are taken out of your paycheck pre-tax, so you want to ensure you are rolling the money over in a way that will avoid a taxable event. There are multiple methods of transferring the money over, and some of these can cause a headache if not handled properly. Work with your advisor to go over the details and achieve confidence that your 401(k) balances are being taken care of and will not incur tax consequences.

4. When Should I Start Taking Retirement Account Withdrawals?

Once you turn 59 ½, you can start taking distributions from your IRAs and other retirement plans, but most people try to delay withdrawing for as long as possible. However, depending on your circumstances, it may make sense to withdraw earlier than 70 ½. For instance, if you choose to delay Social Security and your spouse is younger than you, your taxable income is low and it may make sense to start taking withdrawals from your IRA.

Beyond deciding when to start taking withdrawals, you’ll need to determine an appropriate withdrawal rate. One common principle is the 4% rule. This classic retirement planning principle works as follows: a retiree household withdraws 4% of their retirement savings in year one of retirement and continues to withdraw 4% as their account grows, so that their annual withdrawals grow to keep pace with inflation.

Ongoing Retirement Guidance

Retirement brings up a number of questions and decisions, from deciding where you’ll live to how much you can spend. While working with a financial advisor can be beneficial at any time in life, receiving objective advice and personalized guidance can particularly be helpful as you approach and enter retirement.