Yes, retiring is freeing, with no alarm clocks & no Monday traffic. But there’s a lot of paperwork hiding in the background that you may not realize could slip through the cracks. Here are twelve accounts that you need to update when you retire & these are worth checking before you kick back. Which one of these would you have missed?
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Request an IRMAA reduction after work stops
Medicare premiums sometimes increase for people who earned more before retiring, but Social Security lets you appeal that through Form SSA-44. Just mark “work stoppage” as the reason. You can upload this form through your online account or bring it to an office, along with proof of your income drop, to reduce those IRMAA surcharges.
Turn on Easy Pay for premiums
Anyone who’s not yet on Social Security should pay close attention. Medicare doesn’t automatically take its premiums, and rather than mailing checks every quarter, you can set up “Easy Pay.” This will take the Part B cost right from your bank account in a totally free & safe way. It’ll also avoid late-payment issues, so what’s not to love?
Update the recordkeeper portal
Your old retirement account won’t update itself once you’ve left work. As such, if your HR or your plan’s recordkeeper still has your company email, you could lose some of your statements. You should log in to correct the details & check out the listed beneficiary. There are thousands of missing participants every year, simply because they don’t do this.
Set required minimum withdrawals and beneficiaries
IRAs get tricky once you turn 73, as the IRS requires minimum distributions & the deadlines are strict. But custodians usually have an auto-withdraw feature that’ll stop you from missing those. While you’re in there, make sure the paperwork is correct for beneficiaries, as you don’t want an ex-spouse or a parent who’s long passed away listed.
Stop contributions when Medicare starts
Yes, while you’re working, HSAs are great, but once Medicare kicks in, the IRS rules say contributions must stop. There’s a retroactive clause that states Medicare Part A may backdate coverage up to six months. As such, forgetting to update this account could mean excess contributions & penalties, so log into your HSA and change your future deposits to zero.
File last claims and review COBRA option
Flexible Spending Accounts disappear rather quickly when you don’t use them. After retirement, you normally get just a few months to submit receipts for eligible expenses before the money’s gone, although some employers do let you extend the plan year under COBRA. But you’ll need to check the election notice to make sure everything’s correct.
Report income changes for marketplace plans
Retiring before Medicare could mean that your health insurance comes from the marketplace. Any big life events, like retiring, mean your income changes, which could alter subsidies, so use the “report a life change” button on the site to adjust your credits. Failing to do so could mean that you owe money back come tax time.
Submit Form W-4P for withholding
Unfortunately, pensions & annuities don’t default to the right tax withholding, and the IRS has its own form (W-4P) for these. You’ll want to send it to whoever issues your checks. You may also want to confirm your bank routing number with them because a surprising number of retirees still receive paper checks by accident.
Refresh beneficiaries and billing
Payroll deductions for insurance premiums stop when the job ends & many people forget to move them. You should double-check how your life insurance bills you now. Most of the time, automatic bank drafts are easiest, so you may want to update your account to this method.
Change usage and mileage after commuting ends
Even though you may not be driving to work every day, your car insurance rating might still say you are. Commute use usually costs more than pleasure use & insurers often ask for annual mileage too, while updating those details could lower your premium. All it takes is a quick call or update through your insurer’s app.
Add a successor owner and check bank links
Anyone who’s still contributing to a college savings account for the grandkids should make sure they’ve added a successor owner in case something happens to them. Without one, the account could get locked up in a way you certainly don’t want. Make sure your linked bank account is up to date, too, since you don’t want contributions bouncing.
Update TreasuryDirect bank info and beneficiaries
Sure, TreasuryDirect accounts are easy to forget since you may only look at them once in a while. But that’s no excuse. You have to update any changes in your bank account in ManageDirect before trying to cash a bond or buy a new one. The same goes for beneficiaries, which you should edit online so savings bonds pass as they should.
Sources: Please see here for a complete listing of all sources that were consulted in the preparation of this article.
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