Preparing for retirement

Things to consider:

Retirement income needs:

• Prepare a budget that includes ongoing retirement expenses and one-time, lump-sum purchases. Distinguish essential needs from optional wants. Use this budgeting worksheet.
• Log in to your Nassau County Deferred Compensation Plan account and use the Retirement Income Calculator! You'll find out if you're on your way to having the income you'll need in your retirement.

Pension strategies

Do you or your spouse have a pension? If your pension is with New York State, visit New York State and Local Retirement System (NYSLRS) for details. Find out:

• How much you're projected to receive, based on different retirement dates.
• What survivor benefit options are available for your spouse or other beneficiaries.
• Your payment options.

Estate planning and recordkeeping

Consider whether you wish to leave an inheritance for any family members or charities. If so, estate planning becomes especially important. A qualified estate planning attorney can help you:

• Name beneficiaries on your retirement accounts, annuity contracts and life insurance policies.
• Create a will to direct the distribution of other assets and determine who will care for your minor children or other dependents.
• Establish a living will and a medical power of attorney.
• Establish a financial/durable power of attorney to direct financial decisions if you become incapacitated.
• Decide if you'd benefit from a trust.

Things to consider:

Health care

Understand the health care options that may be available to you both before and after you become eligible to retire. Consider:

• Coverage
• Costs, including premiums, deductibles and coinsurance
• Supplemental coverage

The Health Care Savings Calculator at AARP can give you insight into potential medical costs in retirement.

Long-term care insurance

Begin thinking about how you'll cover the potential cost of long-term care—including help with daily life activities. Visit U.S. Department of Health and Human Services Long-Term Care site for more information.

Taxes

Know how your investments are taxed. Work with a qualified financial or tax professional to determine how to manage those taxes along with state income tax, property tax and sales tax. Don't forget to consider taxes you'll pay on income, like pension and Social Security benefits. 

To learn more about taxes, visit Internal Revenue Service.

For state taxes, visit Retirement Living Information Center's Taxes by State.

Things to do:

• Choose your retirement date and complete necessary paperwork.
• Apply for your defined benefit pension.
• Apply for Social Security, if applicable.
• Set up a meeting with your dedicated retirement counselor.

Keep in mind that trips or calls to the agencies may take some time, and processing times may also involve long periods.

Unused sick, vacation and compensatory time Nassau County Deferred Compensation Plan contribution

Upon separation of service with Nassau County, you may receive payment for unused sick, vacation and compensatory time. The process to contribute to the Deferred Compensation Plan from this check is as follows:

1. Contact Empower Counselor
2. Complete all Empower forms prior to designated Nassau County separation date
3. Receive Nassau County Employee’s Claim for Severance Form (mark “Yes” in the 457 deduction box on this form)
4. Notify Empower Counselor immediately if your designated Nassau County separation date changes for any reason.

Learn more about contributing unused sick, vacation and compensatory time to your Nassau County Deferred Compensation Plan.

Things to consider:

Beneficiary

Make sure your beneficiary election stays current.

Address changes

You will need to contact the Empower Participant Service Center if you have an address change once you have completely separated from service with Nassau County.

Distribution options

Here are the distribution options available to you:

• Keep your money in the plan
• Cash withdrawal (Lump sum)
• Partial Withdrawal: Monthly, quarterly, semi-annual or annual installments
• Roll over to Individual Retirement Account (IRA)

Required Minimum Distributions (RMDs)

The Internal Revenue Service (IRS) requires retirement plan participants to begin taking a minimum distribution amount from their retirement plan upon attainment of age 72 or retirement, whichever is later. These are commonly known as Required Minimum Distributions or RMDs.

Unless you still work for Nassau County, you must take your RMD from your Nassau County Deferred Compensation Plan account during the year in which you attain age 72. You may initiate the first withdrawal by December 31 or wait until April 1 of the following calendar year. Once you begin taking RMDs, even if you return to active employment, you must continue to do so by December 31 of each year until the account balance is depleted.

If you delay your first RMD to April 1, you will be required to take a second distribution before the end of the same year.

Outstanding loan repayment

If you have a loan outstanding from the plan upon retirement, you may continue to repay the loan on a monthly basis or in full at any time. If your repayments stop, the loan will be considered in default, and the remaining outstanding loan balance will be considered a taxable distribution to you in that year. You must contact Empower’s Participant Service Center at 877-778-2100 upon separation to discuss your loan and repayment options.

Any outstanding loan balance not paid back under plan rules after termination of employment becomes taxable in the year of default. Under the Tax Cuts and Jobs Act, for defaults related to termination of employment after 2017, the individual has until the due dates of that year's return (including extensions) to roll over the outstanding loan amount to an IRA or qualified employer plan.