Tuesday, February 22, 2011

Retirement Record Keeping 101

Today's post is a guest post from someone very special - my dad! Dad is not a blogger, but he is an avid writer of letters to the editor. He retired one year ago and has had to navigate the murky waters of retirement record keeping by himself. He's currently putting together a workshop for his former colleagues to help them make the transition easier. As soon as I heard about that, I knew it was a great topic for this blog.

I know most of you aren't close to retirement (perhaps to your dismay) but you might have a parent or aunt that's nearing that next phase of life. Please pass along this information to help them.


Good record keeping is an absolute need for persons preparing to retire or recently retired.

It is impossible to keep track of all the details that have to be sorted through and need to be handy for update and review without some sort of tool for organization. The information is all too important to chance misplacing and time wasting as you rifle through stacks of paper. It’s too easy to forget where things are or should be.

A first attempt at record keeping might be to use files for each different subject. The problem with this is the number and logistics in the file cabinet. You cannot imagine the number of files required until you have 5 or 6 files in hand and don’t have an order established. You will have to dig though the stack of files looking for the correct tab label. There must be a better way.

The solution I have found is to use a single binder with numbered tabs. Starting from the day you decide to retire, you need to keep notes and decision paperwork. The amount of detail involved will be according to your desire. The key is knowing that the information you collected, whether last week or 6 months ago, is in the binder and will always be there. It will always be there because any time you need to remove something to send away, you'll make a copy to send or take and replace the original immediately back into the binder.

Here's a quick and easy way to set up your binder:

* Begin with a 1" binder and a set of 5-10 tabs.
* Between each tab place a lined sheet of paper for taking notes
* Add an index page at the front to give a quick look at which tab number to go to for each subject

Your list will fall into place as you go through the process. You will be amazed how fast the binder will start filling in.

Within each tabbed section you'll keep important direct phone number that can take 20 minutes to an hour to secure. Once you have a direct number, you you do not want to misplace it. Going through the 800-number phone tree every time you call with a question or clarification is brutal. And there will be email addresses for your contacts.

Your index page may look something like this:

1. Income In Retirement calculations (all expected income worksheets)
2. Pension Selection & Amount (there are more than a few choices!)
3. Health Insurance Selection & Costs (for self & spouse) Pre-SSI
4. Social Security Benefits & Amount (when to start, what is expected)
5. Medicare Coverage & Cost (cost will be deducted from monthly SSI payments)
6. 401K to IRA Conversion
7. IRA to Managed IRA Accounts (could be more than one)

Those last few will fill in quickly enough as well.

You will probably want to keep other binder for IRA managed accounts. Most send quarterly reports that are good to store in a similar fashion.

The exact order of the tabbed sections is not important. Information retention is the issue.

A few other tips for staying on top of things:
* Keep a log of all phone calls. Include date, time & the name of the person on the other end. It's a great idea to write down the name of the contact and thank them using their name as you hang up.
* Use your lined paper in each section to log any calls and notes. Record direct numbers here as well. The more notes the better.
* Your lined pages in each section will hold phone numbers, email addresses & web addresses along with your call logs.

A note about electronic record keeping...
All of this record keeping could be done on your computer. However, being able to just go to the file cabinet and pick up the binder is really quick. It makes it easy to take notes as you talk to an agent on the phone no matter where you are. And you can grab the binder and take it with you if you are on the go.

Oh a final tip...
You will need to have a 3 hole punch. Get ready to punch a lot of holes.

Good fortune to you in your retirement.

Jon B.
Feb 2010


Suzanne here again...

It seems so simple. But truly the amount of information thrown at retirees by their employers, health plans, retirement accounts and the government is overwhelming. Without some kind of record keeping system details are certain to be missed. I would hate to see someone miss out on key benefits because they missed a filing deadline or forgot to mail back the right form.

I'd like to add just a few more tips to this excellent plan:
* Use a view binder like this. You can put your primary list of key information in the front of the binder for quick reference. This is a great place to put a phone number & website listing.
* Keep a pen attached to your binder.
* As soon as you receive anything in the mail, take action! If it requires something to be filled out and mailed it, do it immediately. If you need to gather information or make a decision before you can mail it back, put a reminder on your calendar 2 weeks before the due date so you get it mailed in on time.
* Decide on a place to put anything that requires mailing back. One option would be to use the back side of your view binder cover. Check through this pile every Sunday night and prepare anything that needs to get in the mail on Monday morning.

I hope you and your loved ones find some use in this easy organizational system.  If you would like more information specific to organizing for retirement, let me know!

Remember, once your retirement paperwork is organized, you can enjoy life like a day at the park!

Yes - this is my dad, enjoying Christmas day with his grandkids at the playground.

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