How should I use my employer retirement plan?

  • Don’t “cash out” your retirement 401(k) savings before age 59½. This will almost always cost you money, and there are better ways to pay yourself through your retirement years, including using a rollover or keeping money in your company plan.
  • Steady Paycheck: Employer pensions provide a steady “paycheck” for your retirement, in the form of an annuity. Be sure you understand the terms of accepting early retirement incentives and lump-sum payouts in lieu of the annuity.
  • Lump-Sum Option: If you take a lump-sum pension payment from your employer, resist the temptation to spend it! Instead, invest it carefully.
  • Protect Yourself From Inflation: To protect yourself from inflation, set aside some of your pension benefits to ensure you have enough money for your advanced elderly years.