The journal
Before you retire from a city job: the questions to ask first
A pension, a deferred compensation plan, retiree health coverage and Social Security: the questions to put to each, and who answers them.
AI-generated illustration. Not a real home or business.
Four sets of questions, four different offices
Leaving a city job is not one decision. It is several, made with different offices on different forms, and each answer changes the others. A pension option affects what a spouse would receive; when the pension starts affects when savings are first drawn on; health coverage after work affects the month's budget for years.
None of it is hard to understand once the questions are in order. Most of the trouble comes from answering them one at a time, in whatever order the letters arrive.
Each section below is a set of questions to take to the people who can answer them. None is answered here: the answers depend on your own records, and the choices on your household.
The pension: ask the pension system
Questions to put to the pension system, in writing if you can:
- What does my record show for my service, and is anything missing from it?
- What would each payment option pay me, and what would it pay anyone after my death?
- When could my pension start, and what has to be filed first, and by when?
- If I leave before that date, what happens to what I have built up?
A pension's options are chosen on the pension plan's own forms, and in New York being paid to advise on which option suits a household may need an insurance license. A plan here lists the questions to ask the pension plan and how each answer would change the rest of the plan.
In a plan, those questions come in a particular order. Marites lists the questions for a pension system in the order the system's own forms ask them.
Deferred compensation: ask the plan and your benefits office
Many city workers also save through a deferred compensation plan. Questions for the plan's own office and your employer's benefits office:
- When can I draw on the account after I leave, and in what ways?
- What happens if I leave it where it is?
- What are my choices if I want to move it, and what does each one involve?
- Which parts were saved before tax and which after, and does that change anything when I draw on it?
Which choice suits a particular household is advice about investments, and a page that knows nothing about yours cannot give it. The tax side of each choice is a question for your CPA.
Retiree health coverage: ask your benefits office
Health coverage after work is often the question left until last, and one that can shape the monthly budget for years. Questions for the benefits office:
- What coverage continues after I leave, and for whom in my household?
- What will it cost me each month, and can that change?
- How does it work alongside Medicare when the time comes?
- What do I need to file, and by when, so that nothing lapses?
Questions about a particular policy go to the benefits office or to an insurance licensee. A plan records what you are told and works the cost into the month.
Social Security: your statement, then the agency
Questions to answer from your own statement first, and then to put to the agency:
- What does my statement show, and is my record of earnings complete?
- How would my city pension sit beside it?
- If I am married, what would each of us receive, and from when?
- If I may live abroad later, how would payments reach me there?
When to claim Social Security is one of the biggest decisions in a retirement plan, and a plan sets out the questions each choice raises for your household. The amounts come from your own Social Security statement; the decision is filed with the Social Security Administration, which has nothing to do with this practice.
Putting the answers in order
Once the answers are in, they need putting together, and the order is where a plan earns its fee. The pension's start date decides when savings are first drawn on. The payment option decides what a spouse can count on. Health coverage decides how much of each month is spoken for before anything else. Change one and the others move.
No plan here chooses a pension option, a claiming date or an account for you. It lists the questions, records the answers you are given, and shows how each one would change the rest, so that the decisions stay yours and are made in an order that makes sense.
Ask for a first meeting about retirement
A first meeting costs nothing, gives no advice and asks nothing of you afterwards: about forty-five minutes, at the office or by video. The office replies in office hours.