We cover a wide range of considerations in our in-depth retirement guide for AT&T Employees, which you can use to determine when it's best for you to leave AT&T. These variables include, among many others, changes in healthcare and benefits, interest rates, the new tax rates for 2024-2025, inflation, and much more.

It is imperative for individuals to be aware of new changes made by the IRS. The main factors that will impact employees will be the following:

• The 2024 standard deduction will increase to $14,600 for single filers and those married filing separately, $29,200 for joint filers, and $21,900 for heads of household.
  
  
• Taxpayers who are over the age of 65 or blind can add an additional $1,550 to their standard deduction. That amount jumps to $1,950 if also unmarried or not a surviving spouse.

Retirement account contributions: Contributing to your company's 401k plan can cut your tax bill significantly, and the amount you can save has increased for 2024. The amount individuals can contribute to their 401(k) plans in 2024 will increase to $23,000 -- up from $22,500 for 2023.  The catch-up contribution limit for employees age 50 and over will increase to $7,500.

There are important changes for the Earned Income Tax Credit (EITC) that you, as a taxpayer employed by a corporation, should know:

• The tax year 2024 maximum Earned Income Tax Credit amount is $7,830 for qualifying taxpayers who have three or more qualifying children, up from $7,430 for tax year 2023.
• Married taxpayers filing separately can qualify: You can claim the EITC as married filing separately if you meet other qualifications. This was not available in previous years.

Deduction for cash charitable contributions: The special deduction that allowed single nonitemizers to deduct up to $300—and married filing jointly couples to deduct $600— in cash donations to qualifying charities has expired.

Child Tax Credit changes:

• The maximum tax credit per qualifying child is $2,000 for children five and under – or $3,000 for children six through 17 years old. Additionally, you can't receive a portion of the credit in advance, as was the case in 2023. 
• As a parent or guardian, you are eligible for the Child Tax Credit if your adjusted gross income is less than $200,000 when filing individually or less than $400,000 if you're filing a joint return with a spouse. 
• A 70 percent, partial refundability affecting individuals whose tax bill falls below the credit amount.

2024 Tax Brackets

Over time, inflation diminishes buying power because rising prices result in a basket of products becoming more expensive. You will need to account for increasing costs in your plan if you want to keep your retirement quality of living the same when you leave your business. Although the Federal Reserve targets an annual inflation rate of 2%, in 2023 that rate skyrocketed to 4.9%, a sharp rise from 1.4% in 2020. Even though costs have increased significantly overall, there are certain areas, like healthcare, to be mindful of if you are close to or already retired from your employer. 

All of these elements must be taken into account when creating a comprehensive retirement plan from your employer.

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Source: Is it Worth the Money to Hire a Financial Advisor? The Balance, 2021

It matters to start saving as soon as possible. Compounding can have a big influence on your future savings if you have time on your side. Once you've gotten started, it's crucial to keep upping and optimizing your 401(k) plan contributions.

Investing in your company's retirement plan can increase your wealth by up to 79% at age 65 over a 20-year period.
*Source: T. Rowe Price, Bridging the Divide Between 401(k) Sponsors and Participants, 2020

As the years pass, you're presumably in the thick of things professionally at your organization, and your pay probably shows it. However, having a mortgage, raising kids, and preparing for their college are three major conflicting expenses that make it difficult to save for retirement.

The typical planning conundrum of choose between education or retirement savings is often present. The majority of financial advisers would advise you that your main focus should be retiring from your employer, as you will be responsible for funding your own retirement while your child can typically receive financial assistance.

Our recommendations for retirement savings always take into account your particular financial status and aspirations. Nonetheless, during your 30s and 40s, think about setting aside at least 10% of your income for retirement funds.

When you reach your 50s and 60s, you should be at the height of your earning potential and have some of your biggest expenses—like a mortgage or raising children—behind you or shortly in the rearview mirror. Now could be a good time to see whether you can increase your retirement savings target to 20% or higher of your income. This may be the last chance that many individuals have to put money down.

Employees who are 50 years of age or older in 2024 have the option to contribute up to $23,000 to their 401(k) or retirement plan. After they reach this cap, they can make additional $7,500 in catch-up payments, for a total annual contribution cap of $30,500. Every year, these caps are revised to account for inflation.

Why are matching contributions and 401(k)s so well-liked?

With these retirement savings options, you can profit from the following three key advantages:

• Opportunities for compound growth (as seen above)

• Opportunities to save taxes

• Matching the contributions

The term "matching contributions" refers to the fact that your employer will match your individual 401(k) contributions with funds from the business. If your employer contributes as well, the contribution is usually matched up to a predetermined percentage. Regrettably, a lot of people don't benefit from their employer's matching contributions because they don't make the minimum contribution needed to get the full match.

According to a 2022 Principal Financial Group study, 62% of employees said that their employer's 401(k) contributions were very crucial to achieving their retirement objectives.

As per the "2022 Financial Life Benefit Impact Report" published by Bank of America, out of the eligible employees who participated in a 401(k) plan, 58% of them contributed less than $5,000 in the current year.

Less than one in ten participants' contributions, as allowed by IRS Section 402(g) and set at $23,000 for 2024, were determined to have exceeded this ceiling.

According to a Financial Engines report published in 2020, "Missing Out: How Much Employer 401(k) Matching Contributions Do Employees Leave on the Table?", workers who don't take full advantage of their employer match usually leave $1,336 in additional retirement savings on the table annually.

You aren't receiving the entire business match, for instance, if your employer will match up to 3% of your plan contributions and you only contribute 2% of your salary. Your firm is now matching the whole 3% of your contributions, for a total combined contribution of 6%, just by increasing your contribution by 1%. You aren't throwing money away by doing this.

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 After five years of service, you are eligible for a vested pension benefit. However, as the table below illustrates, your benefit will be adversely affected if you do not meet the age AND service breakpoints for your post. You have to fulfill BOTH of the prerequisites.

Will AT&T Freeze their Pension?

The question of whether AT&T will also freeze its pension arises because Verizon did so in 2006. How might it appear if they did? Employees would not be able to accrue any further benefits in the future if there was a pension freeze. Nonetheless, they would be eligible to receive the benefits they have already accrued. Many organizations have switched from defined benefit (DB) plans to defined contribution (DC) plans over the past few decades.

To reduce their present pension commitments, companies offload or freeze their defined benefit pension schemes. Corporations can also transfer risk from the company to the employees by converting from a DB plan to a DC plan. Investors benefit from this trend since less hazardous investments are made by corporations that pay off their pension obligation. However, workers who frequently rely on those DB plans for their retirement years may suffer as a result of this tendency.

Service Pension Eligibility & Calculation

For the purpose of determining an employee's eligibility for retirement, pension, and retiree medical benefits, AT&T uses the "modified rule of 75."

Anyone getting close to retirement ought to be aware of their number. That's the amount you must have saved for retirement. As one approaches retirement from AT&T, there's one more crucial number to be aware of. To assist supplement your AT&T pension, you may argue that it's equally necessary to save the goal amount in your AT&T 401(k) plan. Your AT&T retirement benefits may be significantly impacted by this figure, 75.

Moreover, SBC converted 75 points to Mod 75 in 1999. Recall that not every 75-point combination qualified you after December 1999.

 

Overview

AT&T sponsors the AT&T Pension Benefit Plan, which consists of both a defined contribution and defined benefit pension plan. Depending on the different employee groupings, they have different pension plans. We'll talk about the management and hourly pension schemes explicitly today. Although these are two different plans, they both function similarly overall. 

The plan's benefits are given out via different initiatives. A program is an area of the plan that offers advantages to a certain participant or beneficiary group. One of these is your strategy:

Start the Pension Benefit process (if applicable)

When you are ready to begin receiving your pension benefit, contact the Fidelity Service Center or go to access.att.com > Retiree, Former Employee or Dependent > Login > Fidelity*. You may get started up to 180 days in advance of your benefit start date. *Source: AT&T Nonbargained SPD

Hourly & Management Employee Defined Benefit Example

For Hourly:

- Defined Benefit using Pension bands

For Management, use the greater of:

• - Cash Balance Account
  • - Started 1997
  • - Grandfathered Plan
  • - Hired before March 1997 and partially frozen in May 2002
    
    

• CAM Pension Plan
  • - Not a supplement
  • - Paid as a Lump Sum and/or an Annuity
  • - Hired after March 15th 2001. Eligible after three years
    
    

NOTE: If the difference between the amount of the single life monthly annuity for the CAM benefit and the highest applicable formula (Grandfathered) other than the CAM benefit is:

• - Greater than $400 (benefit is paid as a full lump sum or a partial lump sum with a residual annuity)
• - Less than $400 (benefit is paid as a lump sum)
  
  

You may receive a partial lump sum & a residual annuity ($400 Rule)

Disclaimer: AT&T contains many different groups of employees that are provided with differing pension plan formulas and payout options. The following is information that pertains to Hourly & Management Defined Benefit Plans.

AT&T offers a wide range of plan options. Since most employees are covered by the Hourly & Management pension plans, we will go over how they operate. Let's examine an example of Joe Smith's timeline:

Joe is employed by AT&T in 1992 and signs up for the Hourly Pension Plan:

Plan for Hourly Pensions

Pension bands are used in Hourly's defined benefit plan. Your benefits are determined by a pension band according to your degree of occupation and work title/grade. For every year of service, Joe will get a monthly monetary sum into his account. Joe's pension band benefit could alter annually.

Assume Joe is in Pension Band 120 and employed as a cable splicing technician. He wants to find out how much his hourly pension will be this year and is interested in retiring.

While this formula calculates a monthly pension benefit, you can determine the lump sum equivalent by using the annuity to lump sum conversion table on Fidelity's website.

Let's assume Joe is working and is in Pension Band 113. He is interested in retiring this year and wants to calculate his Hourly Pension benefit.

Bargained Pension example:

  Service Representative, Pension Band=113

  Monthly benefit for 2023 retirement - $59.44

Age 53 with 25 years of service - $59.44 x 25 = $1,486 a month pension benefit. Reduction for age penalties (.5% per month x 24 months) = 12% reduction. Monthly benefit at Normal retirement = $1,486(less 12%) = $1,307.68 a month

Bargained Pension example 2:

  Customer Services Technician(CST)

  Monthly benefit for 2023 retirement - $71.04

Age 57 with 30 years of service - $71.04 x 30 = $2,131.20 a month pension benefit.

Note: No reduction for age penalties

Joe Smith's Pension Plan

This is a general overview of how your benefit operates; however, your plan will vary depending on a number of factors, including age, employment status, years of service, hire date, and salary. The retirement group has experience working with many AT&T workers, so our professionals can discuss the specifics with you and help you obtain the most benefit.

Joe Smith Example:

Hourly (1985 - 1997) = $1500
Cash Balance (1997 - 2002) = $300
CAM (2002 - Present) = $2400

Since the difference between the amount of the single life monthly annuity for the CAM benefit and the highest applicable formula (Grandfathered) other than the CAM benefit is greater than $400, Joe is paid a partial lump-sum & a residual annuity upon retirement.

To calculate your pension benefit follow these steps:

Step 1: Add Hourly and Cash Balance and compare to CAM.
Step 2: Convert Hourly and Cash Balance to Annuity and compare to CAM Annuity.
Step 3: If the CAM Annuity is $400 > than the Hourly and Cash Balance annuity, the payment is a partial lump sum(Hourly and CB), and an annuity of the difference between the combination of Hourly and CB to the CAM annuity.

Management - Cash Balance Account

In 1997 Joe Smith switches to Management and participates in the Cash Balance Account:

• - After 5 years of service Joe will be fully vested with no term age penalties

• - If he receives salary increases, this will affect the calculation of his final benefit

• - Joe will receive his benefit in the form of a Lump Sum, upon retirement

• - In May of 2002 this account type was frozen by AT&T

Now we’ll discuss CAM. This is the plan that the majority of managers fall under today. It was introduced in 2001 and is the only plan that currently isn’t frozen.

In 2001, Joe starts his CAM pension plan:

CAM Pension Plan

• - Assume $0 opening balance as he came from Hourly

• - Joe was hired before 6/12/01 so he is fully vested and eligible immediately

• - Joe's pension benefit may decrease during his early 60's due to life expectancy.

• - (Misconception: When you hit 30 years of service pension benefit decreases)

• - Early retirement discounts & penalties may apply, refer to table A & B (penalties below)

This is one of the only pension plans that is not currently frozen. If the past is any indication of the future, there will be a day when the company decides to freeze this plan as well. For most of you, this will be the largest pension amount you have.

Table A Penalties

• - Less than Age 55 with 30 or more years

  • - 4% per month or 3% per year

• - Less than Age 55 with less than 30 years

  • - 2% per month or 6% per year

Table B Penalties

• You will often walk away with only 20% - 30% of your total benefit
  

Bridging

Do you work in management or hours? Have you left the company for a long time and returned, interrupting your service? Has AT&T updated your NCS date? That's right, bridging issues might make it more difficult to calculate your pension. You will frequently need to acquire manual computations from Fidelity if they are unable to provide you an online pension estimate.

When it comes to bridging, there are several rules. It's crucial to understand that your NCS is not immediately credited on the day you return if you leave the organization and return. Prior to receiving credit for the years of service you put in during your second tenure, there is a waiting period.

Should you decide to switch from hourly to management, or the other way around, you will wind up with two 401(k)s and two pensions. We'll make sure to make the most out of each and every account you have and not overlook anything.

Note: We recommend you read the AT&T Summary Plan Description. The Retirement Group is not affiliated with AT&T.

Next Step:

• What impact do interest rates have on your choice?

• Utilize the "Retirekit" to learn about interest rates, cash flow, and potential pension options that would be most appropriate for you in retirement.

• We can assist you in using the "Retirekit" and give you further information about your own retirement situation. To assist you in making future plans, we may offer you a free consultation.

• To begin the retirement process as your retirement date approaches, speak with an AT&T-focused advisor at The Retirement Group and review the relevant SPD Summary.

• Documentation proving your date of birth, marriage, divorce, Social Security number, and other details for you and your spouse or officially recognized partner will be required by AT&T.

• If your beneficiary designations are relevant to your pension program, you can amend them online with AT&T's Beneficiary Designation feature. See your SPD for further information.

One of the most crucial aspects of preparing for your retirement at AT&T is deciding what to do with your pension. When and how to take the Annuity or Lump Sum should be determined. For you and your family, what is best?

You should regularly simulate your pension benefit in retirement and the pension payment alternatives that will be available to you using the tools and resources provided in The Retirement Group's e-book Library, such as the Retirekit.

You can also call The Retirement Group at (800)-900-5867 to speak with an AT&T-focused expert. We will set you up with an AT&T-focused advisor to assist you in beginning the retirement process and provide you with information regarding your payout.

Lump-Sum vs. Annuity

Given the recent changes at AT&T this is incredibly relevant to AT&T employees and retirees. Click here to watch our free webinar about lump-sum and annuity.

Interest Rates and Life Expectancy

Both a lump-sum payment and a monthly pension benefit are available to current and future retirees under many defined benefit plans, such as the AT&T pension plan. These plans occasionally have unfunded pension liabilities worth billions of dollars; to remove the burden from the books, they provide a lump-sum payment.

The initial lump-sum payment is usually smaller than recurring pension payments over a typical retirement time frame, depending on life expectancy. However, since most of the money isn't needed right away after retirement, most people who choose the lump-sum plan invest the majority of the income.

Another factor to consider is that lump sum payout possibilities of defined benefit pension plans are influenced by both your life expectancy at retirement and current interest rates. as interest rates are low, lump sum distributions tend to be greater. However, as interest rates rise, lump sum payouts tend to drop, so proceed with caution.

Furthermore, as an employee ages and their life expectancy declines, estimated pension lump sum payments for active employees would often fall as well. This may be detrimental to carrying on with your career, therefore you should run your pension statistics frequently and fully comprehend the timing implications. Choosing to take the lump-sum payment rather of the annuity option on the pension is frequently influenced by other considerations such the requirement for survivor benefits, income demands, and tax obligations.

More than half of plan members acknowledge they lack the expertise, desire, or time necessary to handle their 401(k) investments. However, seeking assistance has advantages that go beyond practicality. Research such as this one from Charles Schwab demonstrates that plan members who receive assistance with their investments typically have more successful portfolios: Net of fees, the annual performance difference between the recipients and non-recipients is 3.32%. This implies that by calling an advisor, a participant who is 45 years old could experience a 79% increase in wealth by the time they are 65. That is a significant distinction.

Seeking assistance may be the secret to improved outcomes for all 401(k) plans.

According to a Charles Schwab study, seeking independent professional guidance consistently has a number of favorable results. Among them are:

• Higher savings rates: Of those who took advantage of 401(k) advice, 70% increased their contributions.

• Greater diversification: Individuals who oversaw their own portfolios typically made investments in slightly fewer than four asset classes, whereas those who participated in advice-based portfolios made at least eight asset class investments.

• Higher probability of staying the course: Receiving counsel raised the likelihood that participants would stick to their investing goals, which reduced their reactivity in turbulent market conditions and increased their likelihood of sticking with their initial 401(k) investments in the event of a downturn. Never attempt to handle it alone.

Seek assistance with your 401(k) assets. Your nest egg will be appreciative.

In-Service Withdrawals 

In general, if you meet the requirements listed below, you can take withdrawals from your account while you are still employed.

It's crucial to understand that some withdrawals may be subject to additional 10% penalty tax if you're under the age of 59½, in addition to standard federal income tax. You can contact your AT&T Benefits Center or check online to see if you qualify for a withdrawal.

Converting Your 401(k)

An in-service dividend can be rolled over to an IRA as long as the plan participant is under 72 years old. Both the required 20% tax withholding and the 10% early withdrawal penalty would be waived with a direct rollover. Additional details, including potential limitations on rollovers and withdrawals, are provided in your plan summary.

To satisfy your financial needs, you should always think about obtaining a loan from the plan rather than making a withdrawal as it taxes and permanently reduces your retirement savings. Loans include repayment requirements and are not taxable, in contrast to withdrawals (unless you fail to repay them). Certain situations, such as hardship withdrawals, prohibit withdrawals unless the entire available plan loan has also been taken out.

Additionally, you should be aware that the plan administrator maintains the right to change the withdrawal policies at any time and to further restrict or limit the amount of withdrawals that are possible for administrative or other purposes. Any such limitations shall be communicated to all plan participants, and they are applicable to all employees equally.

Borrowing from your 401(k)

Would you like to? Perhaps you experience a major medical emergency, lose your job, or have some other situation when you require a lot of money. Banks make you go through too many hoops to get a personal loan, credit cards have excessive interest rates, and all of a sudden, you find yourself staring at your 401(k) account and quickly figuring out how to defer retirement by a few years in order to make up for the money you took out.

We recognize your feelings because you require the money immediately. But pause for a moment to consider how this can negatively impact your retirement planning.

Think about these details while determining whether to take out a loan from your 401(k). You may:

• You forfeit the opportunity to grow the money you borrowed.

• Tax and repayment concerns in the event that you quit your job.

NUA, or net unrealized appreciation

There are three things you can do if you're eligible for a distribution:

• Transfer your eligible plan to an IRA to keep postponing paying taxes.

• Pay ordinary income tax on the entire amount of the distribution after taking it.

• Benefit from a more advantageous tax structure on gains by utilizing NUA.

How does one calculate net realized appreciation?

An employee must first meet the requirements to be eligible for a distribution from their qualified plan; typically, at retirement or age 59 1/2, the employee receives a "lump-sum" payout from the plan, which disburses all assets over the course of a single year. You can roll over the mutual fund and other investment portion of the plan into an IRA to further avoid taxes. After that, the highly valued firm stock is moved to an account that isn't for retirement.

When you move business shares from a tax-deferred account to a taxable account, you will receive a tax benefit. You currently apply NUA and are liable for ordinary income tax on the stock's cost base alone. The stock's increased value over its base is taxed at the lower long-term capital gains rate, which is now 15%, rather than the higher regular income tax. This could result in savings of more than 30%.

HSA's

Health Savings Accounts (HSAs) are frequently praised for helping people with high-deductible health plans manage their medical costs. Beyond only controlling medical costs, HSAs offer advantages over more conventional retirement plans such as 401(k)s. This is especially true if employer matching contributions have been fully utilized.

Recognizing HSAs

Individuals with high-deductible health insurance policies can open tax-advantaged accounts called Health Savings Accounts (HSAs). High-deductible plans are those that have a minimum deductible of $1,600 for single people and $3,200 for families as of 2024, according to the IRS. Triple tax benefits are offered by HSAs, which permit pre-tax contributions, tax-free investment growth, and tax-free withdrawals for approved medical costs.

HSA yearly contribution caps for 2024 are $4,150 for singles and $8,300 for families, plus an extra $1,000 for those 55 years of age and above. HSA funds, in contrast to those in Flexible Spending Accounts (FSAs), accrue and are carried over for an unlimited period of time.

Evaluating HSAs and 401(k)s After Matching

Contributions beyond the employer's maximum match in a 401(k) result in less immediate financial rewards. HSAs can serve as a strategic supplement in this situation. 401(k)s provide tax-deductible contributions and tax-deferred growth, but withdrawals are subject to taxes. In contrast, health savings accounts (HSAs) offer tax-free withdrawals for medical costs, which account for a sizeable amount of retirement spending.

HSA as a Tool for Retirement

The HSA shows its strength as a powerful retirement tool after age 65. The money can be taken out for anything, with the exception of ordinary income tax if it is used for non-medical costs. This flexibility is comparable to that of typical retirement plans, plus it comes with the bonus of tax-free withdrawals for medical bills, which is quite helpful considering the rising cost of healthcare in retirement.

Moreover, unlike Traditional IRAs and 401(k)s, HSAs do not have Required Minimum Distributions (RMDs), giving investors greater flexibility when it comes to retirement tax planning. Because of this, HSAs are especially beneficial for people who wish to reduce their taxable income or who may not need to access their savings right away when they retire.

HSA Investment Strategy

First, you should invest in an HSA cautiously, making sure that there are enough liquid assets to pay for short-term deductibles and other out-of-pocket medical costs. But after a safety net is in place, investing in a diverse range of equities and bonds and managing the HSA like a retirement account can greatly increase the account's long-term growth potential.

Making Use of HSAs in Retirement

HSAs can pay for a variety of retirement-related expenses:

• Healthcare Expenses-Primary: HSAs can cover medical expenses to help you transition to Medicare.

• Costs of Healthcare After Medicare: HSAs can cover Medicare premiums as well as uncovered medical expenses, like as dental and eye care, which are frequently not covered by Medicare.

• Long-term Care: The money can be used to pay insurance premiums and for appropriate long-term care services.

• Non-Medical Expenses: HSA funds may be withdrawn for non-medical costs up to the age of 65 without penalty, although income tax is due on these withdrawals.

In summary
In conclusion, after the advantages of 401(k) matching are fully realized, HSAs can be a better option for retirement savings due to their special advantages. Because of their tax benefits and flexibility in using funds, health savings accounts (HSAs) are a crucial part of an all-encompassing retirement plan. People can optimize their retirement financial health and ensure their medical and financial security by carefully controlling their contributions and withdrawals.

What Happens If Your Employment Ends

Unless your job ends due to disability, your life insurance coverage and any optional coverage you purchase for your spouse, domestic partner, and/or children expire on the date of your employment. Benefits for both your basic life insurance and any supplementary life insurance you choose are paid to your beneficiary if you pass away within 31 days of the termination date.

Note:

• You might be able to choose portability for any optional coverage or convert your life insurance into an individual policy.

• In the event that you cease making additional contributions, your coverage will terminate.

• If you pay for additional life insurance and you are at least 65, the insurance company should mail you a letter outlining your options.

• Ensure that your beneficiaries are updated. For more information, see the SPD.

AT&T Beneficiary Designations

It is crucial to choose a beneficiary for the proceeds of your benefit programs in the case of your death as part of your estate and retirement planning. AT&T will use this information to determine who should receive your final salary and benefits. This can include any pension or savings balances you may have, as well as payments from life insurance.

Next Step:

- Be sure to update your beneficiaries once you retire. A beneficiary designation form can be completed online by AT&T for events including births, marriages, divorces, and deaths.

Call one of our AT&T-focused consultants if you have any questions about AT&T perks.

Check AT&T's plan summary to see if you’re eligible to enroll in Medicare Parts A and B.

If you become Medicare-eligible for reasons other than age, you must contact AT&T’s benefit center about your status.

For 28% of couples over 50, the notions of happily ever after and until death do us part are unattainable. The majority of couples accumulated money together for decades, believing they would retire together. They have to use half of their savings to cover the costs of a pre- or post-retirement life after a divorce.

Your ex-spouse(s) might be interested in receiving a share of your retirement benefits if you are divorced or in the process of getting divorced. You must give your employer the following paperwork before you can begin receiving your pension, as well as for each ex-spouse who may be interested:

• A copy of any Marital Settlement Agreement (MSA) and the court-filed Judgment of Dissolution or Divorce.

• A copy of the Qualified Domestic Relations Order (QDRO) that was filed with the court.

To prevent your pension payout from being suspended or delayed, give your employer the documentation they seek. Please give us a call to learn more about what to do if your divorce is affecting your retirement benefits.

Regardless of how recent or ancient the divorce is, you must submit this paperwork to your employer's online pension center.

• Your former partner passed away.

• You are 60 years of age or older.

• Before being divorced, you were married for at least ten years.

• You have not remarried after turning 60.

Are you going through a divorce?

You remain married even if your divorce isn't finalized by the time you retire. There are two choices available to you:

• Choose a joint pension with your spouse of at least 50% when you retire before your divorce is final, or obtain your spouse's signed and notarized approval to an alternative option or lump payment.

• Postpone retiring until after your divorce is finalized and you have the necessary divorce records.

Source: The Retirement Group, “Retirement Plans - Benefits and Savings,” U.S. Department of Labor, 2019; “Generating Income That Will Last Throughout Retirement,” Fidelity, 2019

Should you be unable to receive your benefits, it will be your survivor's responsibility to take appropriate action.

Should you share a pension:

• Pay out the joint pension first. Getting a joint pension is not a given. To begin receiving combined pension payments, your joint pensioner must fill out and return the papers from the pension department of your business.

• Have enough money saved up to pay for living expenditures. It is necessary for your spouse to have sufficient resources to cover the gap of at least one month between the end of your pension and the start of their own pension.

If your survivor is covered for medical expenses by your employer:

• Make the choice to maintain health insurance.

• Your survivor must choose whether to keep your company-sponsored retiree medical coverage if they are enrolled as a dependent upon your death. Survivors are responsible for the entire monthly premium.

Even though you might be tired and ready for a break from the demands and routine of your full-time job, it can make more sense for you financially and emotionally to carry on with your profession.

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