10 Must Know Retirement Terms & Tips


As you are getting ready to retire or build your plan, it will be helpful to know these retirement terms and tips. Planning for this exciting chapter of your life is all about making informed decisions that will impact your financial security.

Below are 10 essential retirement terms:

  1. Full Retirement Age: Full Retirement Age (FRA) is the age at which you’re eligible to receive 100 percent of your Social Security benefit. Depending on when you were born, you’ll reach FRA between ages 66 and 67. If you delay taking benefits until after your FRA, your benefits will increase by 8 percent for each year you delay up to age 70. Think of this as a permanent raise in retirement.
  2. Spousal Benefits: Another strategy that may help you maximize your Social Security income is the spousal benefit. If you are currently married, the spousal benefit gives you the option to receive either your own benefit or one-half of your spouse’s benefit, whichever is greater.
  3. Lifetime Income: A retirement term used to define retirement income that you cannot outlive. There are only three sources of guaranteed lifetime income: Social Security, pensions and annuities. An annuity is a contract between you and an insurance company. Annuities pay a steady income, typically for life. There are many types.
  4. Retirement Asset Diversification: Similar to portfolio diversification (i.e., small and large-cap stocks, bonds, etc.) you may benefit from having a variety of retirement assets. Working with a retirement professional will help you create a diversification plan.
  5. Required Minimum Distributions: These are forced distributions mandated by the IRS to begin withdrawing funds from your qualified retirement accounts such as IRAs and 401k. They are taxable and typically begin at 70½, even if you don’t want or need the money.
  6. Re balancing: Re-balancing is a retirement term and an investment term that takes on added meaning in retirement. It is a strategy to keep your investments aligned with your time horizon and tolerance for risk.
  7. Medicare Parts A, B, C, D: https://lifecyclefinancialplanners.com/medicare-supplement-questions/
  • Part A – Hospital Coverage: If you qualify for medicare, you’ll pay no monthly premium for Part A coverage in retirement, but you will have to meet the annual deductible before Medicare covers hospitalization.
  • Part B – Non-Hospital Medical Coverage: (Doctor’s visits, tests, physical therapy, etc.) You’ll pay a standard monthly premium for Part B coverage. This coverage is optional and you may want to opt out if you still have health insurance through a qualifying employer or spouse.
  • Part C – Medicare Advantage: Medicare Advantage is an alternative to Medicare Parts A and B and offers coverage through private insurance companies that contract with Medicare. These plans may offer additional benefits such as vision or dental care and may come at an additional cost.
  • Part D – Prescription Drug Coverage: Part D plans add prescription drug coverage to Medicare and are offered by one of a number of insurance companies and other private companies approved by Medicare.
  1. Donut Hole: The “donut hole” is a retirement term that is used to describe a gap (or hole) in Medicare Part D prescription coverage.
  2. Long-Term Care Insurance: LTC refers to services provided to people who need help with activities such as bathing, eating and dressing. Extended long-term care is not typically covered by health insurance plans. It is minimally covered by Medicare. Long term care insurance provides protection for these costs that add up quickly with a LTC event.
  3. Estate Planning: As you head into retirement, review your estate plan and estate planning decisions to make sure it’s up to date. A will or trust specifies who gets what after you’re gone. An advance directive, or living will, states your preferences for medical care if you’re unable to make decisions for yourself. And powers of attorney are people you name who can legally make health care decisions or handle your personal finances on your behalf.

Please contact me at 561-869-4500 or email me about a complementary consultation and a review of your coverage. We offer a comprehensive checklist to help you organize all your important documents and decisions.

You can visit us at www.facebook.com/lifecycleplanners and www.linkedin.com/tedbernstein

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Also published on Medium.


Ted Bernstein

Dedicated to helping people create the ultimate retirement security and protection plan to safeguard their families and businesses. I stress guaranteed income solutions, indexed annuities and state of the art wealth preservation strategies. As the innovator of life insurance products without commissions, my recommendations are impartial, objective and always in the best interests of my clients.

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