Planning for retirement: Take inventory

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(MoneyWatch) Have you ever wasted time searching for that one important piece of paper you just know you have but can't put your hands on? I know from personal experience how frustrating that can be. So join me this week in preventing future high blood pressure triggered by the stress of retirement planning.

Welcome to week five of my 16-week series, Planning Your Retirement. This week you'll collect and organize the information you need about your various sources of retirement income: Social Security benefits, IRAs, 401(k)s, pensions, insurance policies, savings or investment accounts, and other benefit programs sponsored by your employer. You'll need this information in the weeks to come to help you with the financial side of retirement planning.

You should set up a folder or series of folders -- paper and electronic -- so you have all the information you need in one place. In the future, when you receive an important document, you'll have a place to put it so it won't get misplaced. Now's also a good time to set up your files, as you prepare for this year's income tax filing.

Just what information should you collect and organize? Here's a checklist of the items you should track down and file:

  • You'll want all the periodic statements for your IRAs, 401(k)s and any other retirement saving accounts you have. If you no longer receive paper statements, create a virtual folder or document to hold all the links. I'd also print a paper version for your files, at least annually, so it's easily accessible.
  • If you have a vested right to a pension under a defined benefit plan from a former employer, get a statement of your earned benefits. This statement should include the amount of monthly income you'll receive when you're eligible to start your benefits, how to start benefits and where you can get additional information if need be. It might be years before you begin collecting this pension, so you'll want to include contact information about how to apply for your pension and also store any notices that update this information.
  • Collect all the booklets that describe your retirement plans, 401(k) plans, and retiree medical plans. The technical name for these booklets is "Summary Plan Descriptions," or SPDs for short. If you don't have paper versions of these, then put the links into a virtual document or folder so they're all in the same place.
  • If you've ever received any special letters or notices from your employer regarding your pension, retiree medical plan or 401(k) plan, put them in the appropriate folder.
  • Gather the statements you've received from the Social Security Administration regarding your impending benefits. These paper statements were suspended in 2011, but you should keep your prior, printed statements because they're still useful. The Social Security Administration now makes these statements available online; check your e-statement for accuracy at least once a year, and then print it out and file it.
  • Many people have more wealth in the form of home equity than in their retirement plans, so keeping this information at hand is important. Put the appropriate real estate documents, including your deed, loan documents, homeowners insurance policy and property tax statements in one place. While you're compiling these documents, look at the interest rate you're paying on your mortgage -- you might save money by refinancing. And find out exactly when you'll pay off your mortgage; your living expenses will drop dramatically at that time.
  • If you have any whole life insurance that builds cash value, get your hands on the policy documents and statements that show these values, the premium amounts and the death benefit. Be sure to include contact information for applying for benefits.
  • If you have any term insurance that doesn't build cash value, collect the policy documents and find out if and when your premiums will increase. Many policies have level premiums for a specified period. When the period expires, you could be facing significant premium increases.
  • If you've purchased long-term care insurance, make sure you have the policy document and any sales literature you were given when you bought the policy. Include contact information for the sales agent, as well as information on applying for benefits.
  • Keep sales literature about any or insurance products that interest you or that may be useful for your retirement. How many times have you thought, "I heard somewhere about an interesting product. Now what was it exactly?" With the literature on hand, you can investigate your options further when the time comes.
  • Keep copies of articles on any financial aspect of retirement that piques your interest. You may not need the information now, but you'll appreciate having it on hand when you do.
  • You're on the way to controlling your retirement destiny! Stay tuned for my next post, which discusses the nonfinancial items you should inventory.

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    View all articles by Steve Vernon on CBS MoneyWatch»
    Steve Vernon helped large employers design and manage their retirement programs for more than 35 years as a consulting actuary. Now he's a research scholar for the Stanford Center on Longevity, where he helps collect, direct and disseminate research that will improve the financial security of seniors. He's also president of Rest-of-Life Communications, delivers retirement planning workshops and authored Money for Life: Turn Your IRA and 401(k) Into a Lifetime Retirement Paycheck and Recession-Proof Your Retirement Years.

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