The 7 Retirement Planning Mistakes of Georgia Power Retirees and How to Avoid Them
Mistakes in retirement planning can cost you thousands of dollars. Learn what errors to avoid and how to avoid them!
Make the Most of Your Retirement Planning and Avoid These Common Mistakes
As a Georgia Power career employee, you’ve got wonderful retirement perks, including the Pension, 401k, and even health insurance in retirement. But great benefits come with many choices. And as the saying goes, the devil is in the details. For more than 20 years, Calder & Colegrove Investment Group has helped your friends and family at Georgia Power navigate their retirement planning and choices. And we want to help you, too! That’s why we’ve compiled these seven retirement planning mistakes of Georgia Power Retirees and how to avoid them.
Asking Siri and Alexa for Help
This age of technology is indeed amazing. We have answers to so many questions right in the palms of our hands through our smartphones. But Siri and Alexa are not retirement advisors. And although they may be programmed with a lot of retirement information, they don’t know how to ask you the right questions! At Calder & Colegrove, when it comes to your retirement planning, we provide crock-pot retirement planning — not microwave retirement advice.
Electing the Bigger Pension Check
The Georgia Power pension provides a rare benefit not included in most companies today. — a lifetime guaranteed income. But that pension has many options. When Georgia Power pre-retirees consider their options, it’s natural to be attracted to the pension option that provides the greatest monthly income. But be careful, because that bigger income might be like a moth to a flame. There are potential problems in electing the highest-income option. The highest-income option is called the “Levelized” benefit. Especially popular for younger retirees, it provides more income in the early years of retirement, but it drops off significantly at age 65. The name “levelized” is used because it is assumed that the retiree turns to Social Security income at age 65 in order to make up for the large drop-off in pension income that occurs at the same age.
The next highest income is the “Life Only” election. Just as its name suggests, “life only” means that it pays on the life of the retiree only. And for someone who is married, choosing life only means that when you die, your spouse would receive no income from your pension. This is why in many instances we encourage Georgia Power pre-retirees to consider the option called “Life Only With Survivorship.” This pension option provides income for the life of the retiree, plus, it provides a survivorship income for the spouse as well. There are many factors to take into consideration, and therefore, once size does not fit all.
Retiring Too Early
If you’ve been a football fan for long enough, chances are you’ve seen your favorite team march down the field, ready to punch it in for a touchdown, only to turn the ball over and see the other team take it back for a score. This is called a “14-point swing.” Retirement planning is the same way. The day you retire, your paycheck stops and you begin withdrawing retirement assets to pay for your expenses. If you retire too early, you are much more likely to run out of money before you run out of life. And the last thing any retiree wants to do, especially later in life, is to find out that they have to go back to work.
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