Saving for retirement is becoming more and more challenging. Longer life expectancies, fewer traditional pensions, and making the right investment decisions are the most obvious challenges. 

But there are other threats to your retirement. Here's a look at some of them:

  • Benefits can change. Your employer can't take away benefits you've already earned, but benefits going forward can be reduced. Traditional pension plans experienced massive losses during the market decline 
    earlier this decade and companies had to make up for it. This might involve a reduction in benefits, so keep your eye on any changes your employer makes. 

  • Switching jobs can affect your retirement benefits.  If you have a traditional pension plan, don't change jobs without considering your pension benefits. The same applies to 401(k) plans with matching employer contributions. One survey found 41 percent of companies with 401(k) plans do not fully vest matching contributions for at least five years You may find staying at your job a while longer will significantly increase your pension benefits. 

  • Don't forget about pension benefits at previous employers.  Many employees leave a company without realizing they are entitled to pension benefits. Before changing jobs, check with your employer to find out what benefits you are entitled to. Then keep track of the company so you can claim benefits when you retire. 

  • Early retirement can significantly reduce your retirement benefits.  Sure, it sounds great to retire before age 65 with company pension benefits. But don't just look at how much you'll receive when you retire early. Also consider what you would receive if you wait until normal retirement age. Retiring early can dramatically lower your monthly pension benefit for several reasons -- you don't have as many years of service, salary increases you would have earned aren't considered, and those extra years of benefits cause a large actuarial deduction when 
    benefits are calculated. 

  • You may not be able to count on health insurance benefits after retirement. As health insurance costs change , many companies are changing or phasing out their health insurance benefits for retirees or increasing retirees' share of the cost. While Medicare is still available once you turn age 65, those benefits don't pay for prescription drugs and some other medical costs. Whether or not you can count on health insurance benefits is often a significant factor in deciding whether you can retire before age 65. 

  • Social Security benefits are changing. Normal retirement age is gradually increasing from age 65 to age 67, a change affecting anyone born in 1938 or later. You can still receive reduced benefits at age 62, but the reduction is increasing from 20 percent to 30 percent, depending on your year of birth. These changes are meant to encourage you to retire at a later date.

  • Decide carefully before taking a lump-sum distribution.  Some traditional pension plans allow lump-sum distributions or monthly pension benefits. Be careful before taking a lump-sum distribution. While the amount of the distribution might seem large, are you sure you can invest it and guarantee the monthly income provided by the pension plan?

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