Planning Your Retirement: Take Inventory

Last Updated May 1, 2011 11:38 AM EDT

Have you ever spent 15 minutes or more looking for that one important piece of paper? I know from personal experience how frustrating that can be. So join me this week in preventing future high blood pressure caused by retirement planning.


Welcome to Week Four of my 12-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, IRAs, 401(k)s, pensions, insurance policies, and other benefit programs sponsored by your employer. You'll use this information in the weeks to come.

You should set up a folder or a 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.

Just what information should you collect and organize? Here's a list to help you get started:

  • You'll want all the periodic statements for your IRAs, 401(k)s, and any other retirement saving account. 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.
  • 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 should include the amount of monthly income you'll be receiving, when you're eligible to start your benefits, how to start benefits, and where you can get additional information. It might be years before you collect this pension, so you'll want to include contact information about how to apply for your pension, and store any notices that update this information.
  • Collect all the booklets that describe your retirement plans, 401(k)s, and retiree medical plans. The technical name for these booklets is Summary Plan Descriptions, or SPDs for short. If you never received paper versions of these, then again put the links into a virtual folder.
  • If there are any special letters or communications from your employer regarding your pension, retiree medical plan, or 401(k), put them in the appropriate folder.
  • Gather the statements you've received from Social Security regarding your impending benefits. These statements are usually mailed to you about three months before your birthday each year. These paper statements were suspended in 2011, but keep your prior, printed statements because they're still useful. The Social Security Administration is working on making these statements available online; when this feature is available, check it for accuracy at least once a year, and then print your statement.
  • Collect any records that apply to chronic medical conditions you may have. It's possible that many years after you were first diagnosed or treated, your doctor may want to know the details about your medical history, medications you've taken, or the results of screening tests. Include contact information for your medical providers.
  • Many people have more wealth in the form of home equity than in their retirement plans. Put the appropriate real estate documents in one place, including such paperwork as the deed, loan documents, and property tax statements.
  • If you have any whole life insurance that builds cash value, get your hands on the policy documents and statements that show these values and the death benefit. 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 and information on applying for benefits.
  • Keep any sales literature about any investments 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?"
  • Finally, keep copies of articles on any aspect of retirement that piques your interest, including housing, health, lifestyle, investing, or insurance.
One word of advice: You might be tempted to read these items while you're in the process of collecting them. I'd suggest you resist that temptation and simply focus on collecting and organizing. Once all the documents are neatly stored in their respective folders, then you can go back and study the information.

Once you've compiled the financial information, then think about your social assets. Who are the people you can rely on for support in your retirement years? What government or nonprofit organizations might help? Most people will need to supplement their financial capital with human capital in their retirement years, so it's important to include a social inventory for your retirement. You might even want to create an electronic file that includes contact information on these people.

As with the steps I've outlined in prior weeks, it might take more than one week to collect this information. That's OK -- take all the time you need. And keep at the steps you started in prior weeks -- this post and the others in this series will still be here at CBS MoneyWatch if you need to refer to them again. Just get started and keep making steady progress. Take a few small steps each week, and you'll make significant retirement planning progress throughout the year.

You're now in control of your retirement destiny!

More on MoneyWatch:

  • Steve Vernon On Twitter»

    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.