Continuing income a concern for retirees

After a lifetime of hard work, SMART TD rail, bus and airline members look forward to a secure retirement.

In an ideal world, it would be that simple. In the real world, careful planning and attention to detail are essential.

Topping the list of retirement concerns are money and healthcare insurance, but you also must present certain documentation prior to receiving benefits.

Sources of income

As a rule of thumb, between 70 and 80% of pre-retirement income is needed to enjoy a comfortable retirement, says the Social Security Administration.

Neither Railroad Retirement (covering career railroad workers), Social Security nor CalPERS (covering certain California public transit agency workers) was intended to be a retirees’ sole source of income, and thus will replace only about 40%t of pre-retirement income, says the Social Security Administration.

Railroad Retirement, Social Security and CalPERS retirement benefits should be thought of as part of a three-legged financial security stool — the other two legs to include other investments, such as your home equity, certificates of deposit, individual retirement accounts (IRAs), a 401(k) savings plan and whole life insurance.

Those taking early retirement, or retiring on a disability, may be eligible for certain supplemental benefits until they reach full retirement age. If you are retiring early, you should determine from your employer, Medicare and/or Railroad Retirement, Social Security or CalPERS, what supplemental benefits may be available to you.

Monthly benefits

Railroad Retirement and Social Security annuitants and their spouses will receive monthly benefit electronic deposits directly from the federal government.

Whether it’s Railroad Retirement, Social Security or CalPERS, those agencies will respond to your request for estimates of monthly retirement benefits available to you and your spouse. One of your first pre-retirement chores should be to obtain this estimate because those benefits will be the foundation of your post-retirement income. You may also wish to speak with a certified financial planner, and/or a UTUIA regional insurance manager, about post-retirement financial issues.

Time to retire

Filing for retirement benefits — and investigating Medicare health care options – should begin at least three months prior to your planned retirement date.

Filing for benefits generally is accomplished by visiting a Railroad Retirement, Social Security or CalPERS field office, where you will be asked to provide various documents necessary for the processing of retirement benefits payable to you and your spouse. Information on the location of field offices may be obtained by calling the toll-free telephone numbers listed here.

During the pre-retirement interview, you may determine that there is an advantage to you or your spouse waiting a little longer to draw retirement benefits. Be sure to enquire about limitations on post-retirement earnings, and how such earnings may reduce Railroad Retirement, Social Security or CalPERS benefits.

With some advance planning and attention to detail, the transition from employment to retirement should be smooth sailing. The best time to begin the process is now!