Are you a public employee and close to retirement age? If you prefer to not ‘separate from service’ quite yet, opting for a DROP retirement program can be worthwhile.
Depending on your employer, DROP is short for “deferred retirement option program” or “deferred retirement option plan.” DROP plans first came about in the 1980s for public-sector employees. Currently, members of law enforcement, firefighters, educators, and other civil employees often have this sort of program as an option for delayed retirement.
You have probably heard of some of the many states that offer a DROP program, including Florida, Ohio, Texas, and California. Of course, state governments aren’t the only ones with DROP programs. Municipal governments also offer DROP retirement options to their employees.
DROP benefits can be a great boon to employees who would otherwise prefer to keep working and not quite settle into retirement. If you do have this option as part of your retirement benefits, it’s a good idea to look more into it and see if it might make sense for your working goals.
Are you unsure about whether your retirement system has a DROP option? You can check with your HR department for more information.
All of that said, here is a quick rundown of what deferred retirement option plans involve and what sort of benefits you might obtain from it as a long-term civil employee.
Early on, your retirement planning was probably focused on accumulating savings and growing your money. You aimed to invest and to enjoy solid returns for your money, perhaps with an advisor’s help.
However, things change as we get closer to retirement. Now, it’s more important to protect the money you have put away over the years. And once you retire, you will use this nest egg to replace the income stream you received during your career. Whether it was from a job, entrepreneurship, or other programs, that income source will change in some way.
A well-thought-out retirement income planning strategy can make a difference in helping you enjoy a comfortable lifestyle. This quick and in-depth guide will lay the groundwork for helping you create an effective income plan.
Keep these retirement income planning tips in mind as you start planning for how you will have financial security for many years ahead. Here are a few things to know and do in order to increase your chances of a secure, fulfilling retirement.
When you are in the later stages of your career, retirement might be the furthest thing on your mind. It’s no wonder, as many other financial priorities are likely competing for your time and attention.
At this point, many people are thinking about how they will help their kids pay for college. For others, it’s about assisting their aging parents with costly health expenses. Or perhaps paying off debt is top of mind.
But retirement can creep up quickly. For some folks, it can be sooner than they think, whether via a forced early retirement or a layoff that makes it hard to find another job. Read More
If you live in the United States, then you know first-hand about taxes that we have to pay. In retirement, those taxes can add up.
Sales tax, income tax, estate tax, and gift tax are just some of the ways that Uncle Sam collects from taxpayers in order to meet his financial obligations.
The subject of taxes is always a hotbutton issue in presidential elections as it is in state elections. With talk of possible tax hikes at present, many people who are retired and nearing retirement are wondering about how they can watch their tax bills.
Fortunately, there are a number of things that you can do to help alleviate, and maybe reduce, the taxes that you owe every year when you file your return.
Here’s a quick, high-level look at the different taxes in retirement that you might face – and what you might want to talk to your financial professional about planning for taxes-wise. Read More
Up until this point, you may have adopted an investment strategy that had growth and wealth accumulation as your top goals. But these priorities tend to change as you get closer to retirement. Read More
With that in mind, there are ways to increase the stockpile of savings that you have for your post-career lifestyle. ‘Tax-me-later’ vehicles can increase the amount of money that you have in retirement. In financial circles, this sort of vehicle is known as a tax-deferred asset.
In other words, it’s an asset where you don’t pay taxes on your money until you start making withdrawals from there. When you do withdraw money from this asset, you will pay income taxes on the withdrawn amount. Read More
You have worked hard to reach this point. Now it’s your turn to make the most of this point and enjoy the things that you may have delayed or put off during your working years.
Here are 11 steps that you can take to help ensure that you are ready for the big day when it finally comes. You can use these steps as a starting guideline for putting your retirement planning in order and being ready to enjoy your post-career lifestyle. Read More
When you think of the word “risk,” you may get a mental picture of such activities as skydiving, race car driving, rodeos, or other similar activities that have uncertain outcomes. For investments, the word “risk” may make you think of losing your life savings on a high-risk venture such as an oil and gas drilling partnership.
But the reality is that there are many different types of investment risk. All investments carry their own types of risk. It’s important to note that no investment exists without any type of risk. Read More
Everyone faces challenges to some extent when moving into retirement. Even those with the best-laid plans can still have some financial hiccups. And with everything that has happened in recent years, millions of Americans are wondering what it all might mean for their financial futures.
Take, for example, a 2020 workplace wellness survey put out by the Employee Benefit Research Institute. In the study, 1,028 workers of ages 21-64 said that they worried about their finances and retirement savings.
Two-thirds of employees felt stressed when they thought about their financial future. Almost half were concerned with their household financial well-being, with saving for retirement and having funds for an emergency being the top stressors. Read More
Financial planning for retirement, or “post-retirement planning,” doesn’t end once you retire. Even if you have accumulated enough money for a secure retirement, your plan will require ongoing checkups to confirm that everything is going smoothly.
You will have to continue to make changes and adjust your plan as time goes on. Retirement can last as long as one-third of someone’s lifetime, as medicine, wellness, and technology have seen tremendous progress in recent decades.
In other words, having an ongoing plan for this phase of life is quite crucial. You may also experience more changes in retirement than you have previously, as your abilities and health evolve over time.
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