Applying for Your Retirement Benefits


Up to now, you've been concentrating on saving for retirement; however, now that you're retired, you'll be shifting gears and transition into spending your retirement income. Depending on your financial plan, this could involve accessing your account in your employer's retirement savings plan and/or collecting any pension or Social Security benefits you may be eligible to receive. Whatever the source, you'll need to submit some type of application to collect the money.

The same is true for your post-retirement health care coverage. No matter the source, you'll need to fill out an application for that, too. And you may have a deadline for filing that application. Missing the deadline could mean you are no longer eligible for under that particularly plan or will have to pay higher premiums for coverage.


Accessing Your Retirement Savings

Distribution options from retirement savings plans depend on the plan and the investment provider. Depending on your employer's plan and your investment provider your distribution options may include: unlimited partial withdrawals, a lump sum payout, installments (fixed period or fixed amount), and/or life income options.

Contact your investment provider to find out what distribution options are available to you and the procedure for accessing your account. Under federal law, required minimum distributions must begin by April 1 of the year after you either attain age 70½ or sever employment with the sponsoring employer, whichever comes later.

Taxes on Your Distributions

One of the top benefits of participating in your employer's retirement savings plan, is the ability to save on a tax-deferred basis. However, tax-deferred doesn't mean tax free. You do have to pay taxes on those savings. Your pre-tax contributions, employer contributions (if applicable), and any earnings on either type of contribution will be taxed as ordinary income in the year you receive them (often when you're in a lower tax bracket). And, if you are under age 59½ when you receive the money, you may also have to pay a 10% federal income tax penalty.

Distributions of any Roth 403(b) or 457(b) contributions you've made are tax-free, since you've already paid income taxes on these contributions. Distributions of earnings on Roth contributions are also exempt from federal, and possibly state, income taxes if you meet certain conditions. Refer to your employer's plan summary or contact your financial professional for details. You can also contact PlanConnect® or call the Service Center at (800) 923-6669 for more information.

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Please be advised that this web content is not intended as legal or tax advice. Accordingly, any tax information provided in this web content is not intended or written to be used, and cannot be used, by any taxpayer for the purpose of avoiding penalties that may be imposed on the taxpayer. The tax information was written to support the promotion or marketing of the transactions(s) or matter(s) addressed, and you should seek advice based on your particular circumstances from an independent tax advisor.