Retirement & IRAs

Retirement Planning: Already Retired?

Retirement Planning Doesn't End When You Retire. You've worked hard and now it's time to enjoy the benefits. But you may still have questions about your savings and spending or other to-do items on your planning list.

We're here to help. We want to help your hard work pay off for years, even decades, to come. So talk to your State Farm® agent about your retirement plan and the topics below to make sure you're moving in the right direction.

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Review Your Income Sources

When you're retired, one of your goals should be to maximize and help protect your income sources so you can live comfortably and confidently.

You may consider leaving a portion of your investments in a higher-risk, or aggressive, allocation adjusted for a longer timeline. In addition, you might consider placing two to three years of expenses in a liquid account – such as an interest-bearing savings, checking or money market account – to help safeguard against market downturns. It may be worth a visit with your State Farm® agent, who can review your asset allocation and help you re-determine your comfort with investment risk.

You also need to decide when you want to begin receiving Social Security benefits. You can start drawing benefits as early as age 62, but you'll receive more money each month if you wait until your U.S. government-deemed full retirement age. Your benefits will continue to increase until age 70.

If you haven't yet filed for benefits, you can easily estimate how much you can expect from Social Security. Knowing your approximate benefit amount is essential if you're planning to rely on it for retirement income. For more information, talk with your State Farm agent about our free Retirement Distribution Report.1

Regardless of when you plan to begin drawing Social Security benefits, or what your full retirement age is, you must apply for Medicare three months before your 65th birthday to avoid delay in the start of your Medicare Part B coverage. Keep in mind that you may also need a supplement plan to cover the gaps where Medicare falls short, as well as a prescription drug plan. Contact your State Farm agent for information about how State Farm Medicare Supplement insurance helps pick up where Medicare leaves off.

You can estimate how long your retirement savings will last by visiting our convenient calculator.

How Much Money Should I Spend?

Now is the time to start enjoying your retirement, but you'll want to be careful not to withdraw too much money during the first few years of retirement. Even if you've saved the suggested 70 to 80 percent of your previous yearly income, you certainly don't want to overspend and risk running out of cash.

A 2014 study by the Employee Benefit Research Institute found that about 43% of Boomers and Gen Xers are at risk of running out of money in retirement. Also it is estimated that 83% of the lowest income earners and about 30% of higher income earners are likely to run out of money in retirement. Single females are by far the demographic most likely to have a retirement shortfall. Individuals younger than Baby Boomers are also facing a larger deficit due to the lack of pensions available and other factors.2

You don't want to make that mistake!

Fortunately, you may be eligible for a free Retirement Distribution Report with the help of your State Farm agent. Once we've entered your projected retirement savings and spending needs, your State Farm agent, with the support of an experienced team of professionals, will consolidate all your information and generate a Retirement Distribution Report. This report will help highlight common potential financial problems and provide steps to take that may assist you in reaching your goals. To get started, contact your State Farm agent.

Find Other Income Sources

Retirement can be expensive. These days, more and more retirees are seeking jobs, either because they need the money to make ends meet or miss the structure a job provides. You may want to consider consulting or finding a part-time position in a new field to generate additional income.

If you start collecting Social Security early, your benefits will be reduced $1 for every $2 you earn over the current earning limit until you reach your full retirement age. Fortunately though, once you reach that age, your benefits are recalculated, taking into account the months that benefits were withheld. Then you can work as much as you want, with no earning limits.

Keep Planning

Your future doesn't end at retirement. Estate planning will help ensure you've protected your family's interests as well as your own.

An estate plan involves the creation, conservation, and distribution of your assets. Your estate plan may be a last will and testament, or it might also include life insurance, trusts, business continuation plans or charitable arrangements. Regardless, you should consider creating an estate plan that pays estate expenses (including federal estate tax), provides your family members with income after you're gone, and distributes your assets to family members and other heirs with the least amount of loss possible.

Estate planning is an ongoing process. Review your estate planning documents once a year, or when life changes necessitate it. Remove outdated and irrelevant documents as you go to avoid confusion.

Relax And Enjoy

You've earned your retirement through years of hard work and savings. Enjoy this time in your life and remember there are many more good times ahead. We look forward to working with you and helping you get there.

1A minimum of $250,000 in current investable assets is required to complete a retirement report.

2Employee Benefit Research Institute, "EBRI's Retirement Security Projection Model®", Feb 2015.


Neither State Farm nor its agents provide tax, legal or investment advice. Customers should consult their own legal, tax, or investment advisors regarding their specific circumstances.

Securities Issued by State Farm VP Management Corp. For more information, call 800-447-4930. AP2015/10/1881

Asset allocation does not assure a profit or protect against loss.

Securities, insurance and annuity products are not FDIC insured, are not bank guaranteed and are subject to investment risk, including possible loss of principal.

State Farm VP Management Corp. is a separate entity from those State Farm entities which provide banking and insurance products.

Guarantees based on the claims paying ability of the issuing life insurance company.

State Farm Life Insurance Company (Not licensed in MA, NY or WI)
State Farm Life and Accident Assurance Company (Licensed in NY and WI) Bloomington, IL
State Farm Mutual Automobile Insurance Company Bloomington, IL