Most likely you already have considered financial
planning for retirement, but there are many other aspects of retirement
that you need to consider. The best suggestion from the many books
written about retirement is to start planning for retirement several
months before your actual retirement date.
You should develop a plan or purpose for your life
in retirement well in advance of your retirement date. Only you can
decide if the plan or purpose will be something as ambitious as
launching a new career, as straightforward as continuing scholarly
pursuits, as simple as devoting time to travel, leisure activities, and
volunteerism, or some combination of these. But you do need to develop
this plan to avoid a difficult transition from work to retirement.
It’s important to avoid going from a very busy
schedule with most days planned well in advance to one with nothing on
your schedule. You may move quickly from having constant external
demands on your time to having to determine for yourself how to best use
your time. Upon reaching age 60, your life expectancy is another 20 or
more years. So, how will you spend your time?
New or expanded volunteer activities are a popular
option for retirees, but here again advance planning is essential. The
most popular, well- publicized, and attractive volunteer options may
attract more volunteers than needed. Many agencies have training and
orientation requirements, which can delay for months the time when a
volunteer can actually begin.
Faculty who choose the FERP program also need to
consider how their plan of retirement activities will be impacted by a
return to four months of full time teaching or eight months of part-time
teaching each year. Are one’s months of retirement activities and
commitments the type that can be put on hold for a part of each year
while active on FERP?
Choosing Your Retirement Date
Both the campus and CalPERS offer excellent
workshops on planning for retirement. You should attend at least one of
these during the year before you plan to retire. You also can request
an estimate from CalPERS of your retirement benefit. In addition to
attending campus and CALPERS sponsored workshops on retirement planning,
you should request, at least one year in advance of your anticipated
retirement date, a copy of the booklet, “Stepping into Retirement… A
Guide to Completing Your CalPERS Service Retirement Election
Application.” This is available over the web through
http://www.calpers.ca.gov/
The booklet contains several useful guidelines,
including the Calculator, which, in contrast to the Estimate Request,
allows you to construct different computer scenarios to see the impact
of age, final salary, and years of service on your retirement
allowance. It also shows how the various retirement options, such as
continuing benefits for your surviving spouse, will affect your monthly
allowance.
An equally, if not more important, resource for
choosing your retirement date is our Human Resources Department. They
can help you determine whether it is worth teaching an extra semester or
year to reach an extra year of age and/or service. Most faculty members
retire at the end of the academic year. (Since the CalPERS age credits
increments quarterly, it may be to your advantage if you plan to retire
at the end of the academic year to wait until you reach that date during
the summer to actually retire.) Human Resources can help you determine
which date is more beneficial for you. If you plan to enter FERP and
also wish to teach summer school, you will need to pick a date that is
after the end of the summer session that you teach. The situation is
further complicated for 12-month Chairs and other such employees who can
“cash out” unused vacation hours, but only if they move directly into
retirement after the last day of their 12 month contract. The CSUF
office of Human Resources will be a valuable tool in your
decision-making. They are located in College Park, room 700. Extension
2425.
CSU-ERFA also makes available without charge a retirement
planning program developed by three Cal State Fullerton faculty
members -- Herb Rutemiller, Gerry Marley, and Bill Heitzman.
This program can be used by academic year and 12-month faculty
members as well as academic administrators who are under age 70.
The Rutemiller-Marley-Heitzman program provides a detailed 13-page
report that allows the faculty member to compare all CalPERS
retirement options for a range of retirement ages that bracket the
faculty member's target retirement age. The report also
includes estimates of Social Security benefits and FERP salary as
well as an estimate of the present value of each retirement option.
For more information please see the
CSU-ERFA
Retirement Planning page.
Insurance
Medical
As an annuitant, you may elect to stay with the
same health care plan you were on when employed (known as the “basic
plan”), or during the open enrollment period, you may join another
health care plan. CALPERS has contacted with Pacific Business Group on
Health (PBGH) to provide state employees with a thorough on-line tool
that assists in comparing health plans. It is complete. Fullerton’s
website refers us back to CalPERS and the PBGH tool.
http://hr.fullerton.edu/benefits/health_benefits.htm
As long as you are under 65, everything is
relatively straightforward. When you turn 65 you must enroll in both
Medicare parts A and B.
Here are some guidelines:
1) If your spouse is covered under your health plan
and reaches 65 before you do, ask to have Medicare Part B coverage for
your spouse DEFERRED (do NOT turn it down). Then when you also reach
65, you can both qualify for Medicare and the CALPERS supplemental plans
without going through a waiting period.
2) Like all legal residents in the U.S. aged 65,
your primary health insurance is now Medicare (Parts A and B). Part A
is “free”; we pay for part B. (If you are collecting Social Security,
the cost of part B is deducted from your Social Security check.) You
continue to be covered by CalPERS which pays for your supplemental
coverage. You may be able to upgrade your supplemental insurance
significantly at this time, to go on any plan offered by PERS, at no
additional cost. Many people choose to switch to a PPO at this time.
Shortly before you turn 65 (about three months), Social Security sends
you a notice to enroll in Medicare. Follow these instructions
carefully, noting to Social Security that you are covered by CalPERS.
It is important not to delay this process or otherwise you might find
yourself without coverage during the transition period. (If you do not
receive such notification, be sure to contact your nearest Social
Security office 90 days before your 65th birthday to ensure
that you receive coverage.)
When you turn 65, CalPERS will send you a form
asking you to certify that you have enrolled in Medicare parts A and B.
You must then make a choice about which supplemental plan you want.
The CalPERS website
http://www.calpers.ca.gov/ lays out those options. Insert
the word Medicare in the search box. That will take you to a
page with links to several documents that provide information about
Medicare enrollment and supplemental health plans available through
CalPERS.
Prescription Drug Coverage: Medicare Plan D
CalPERS recommends that you NOT opt for Medicare
Plan D for prescription drugs, maintaining that CalPERS coverage (for
all plans) is currently more comprehensive than the Medicare plan. (It
is very important that you do not enroll in an INDIVIDUAL Medicare Part
D drug benefit plan. Such enrollment could affect your eligibility for
future CalPERS health benefits. Also, do not give any personal
information to telemarketers who many solicit you on behalf of such
plans.)
Dental
The full premium for dental insurance is still paid
by the state, but your co- payments may increase. Upon retirement you
are switched from PMI, DeltaCare, and Delta Dental “Enhanced Plans” to
the “Basic Plans”. On average, the changes are relatively
minor. Many covered services in the plan change from 80% to
75% paid by the insurance carrier. Some procedures go from
100% paid (fluoride application, for example) to 75%. A chart
comparing the differences between the “Enhanced” and “Basic” plans
is available from the campus human resources office.
(Editor's note: If you are participating in
the Faculty Early Retirement Program (FERP) your dental benefits remain
at the "Enhanced" level while you are in FERP.)
Vision
Vision coverage does not continue after retirement
but you can elect a COBRA (Consolidated Omnibus Budget Reconciliation
Act-an odd acronym for something that means continuing coverage after
one has left employment) to continue coverage. If you are on FERP,
vision coverage does continue during the FERP period although there is a
gap in the first year for those not teaching in the Fall and not
teaching again until the Spring term.
For a family of two, the current cost of a COBRA is
slightly less than $10.00 a month, and coverage may be continued for up
to 18 months. The cost of nearly $120 per year comes close to covering
an eye exam and a pair of glasses at a regular vendor. (The College of
Optometry offers discounts for CSUF folks and for those in Kaiser,
optometry is a covered benefit. Other PERS health plans may also have a
vision benefit.)
Social Security
Starting at age 62 you will be eligible for Social
Security but you will not receive full monthly benefits if you start
collecting before you reach “full retirement age”. This is determined
by the year of your birth. The best source of information about your
benefits is through your yearly statement that you should have from
Social Security. Social Security can be reached via the web at
http://ssa.gov. If you continue to work,
e.g. through FERP, your benefits may be reduced until you reach your
“full retirement age”. For more information on this “offset” go to
http://www.ssa.gov/pubs/10069.html.
You should contact Social Security approximately 90
days before you wish to begin collecting your retirement benefit.
Tax Issues
It is important to realize that Social Security
withholds no money for federal or state income taxes unless you send in
a specific form for that purpose. Also the amount withheld from a FERP
check may be insufficient to cover your tax load. It is important to be
aware of this so that you are not surprised by the amount of taxes that
you will need to pay for the first year that either or both of these
income sources take effect.
Campus Parking
If you have been granted emeritus status, you have
free parking on campus. Your regular parking permit will no longer be
valid as of your retirement date so you will need to make arrangements
for an Emeriti pass. This may take some time so plan well in advance.
The current contact person who initiates the process is Norma Morris in
the President's Office, so you will need to notify her at
nmorris@fullerton.edu or 714-278-5839. The
pass will need to be renewed as indicated on the pass itself. When your
permit is set to expire, notify Judy for a two-year renewal.
Note that emeriti parking passes currently are
valid only in the surface parking lots on campus, not in the parking
structures. However, except for handicapped spaces, parking regulations
are not enforced on campus from 5PM Friday until 7AM Monday. During
those hours you may park in the parking structures as well as the
surface lots.
Organizations to Consider
CSUF Emeriti:
This is the local organization for faculty and
staff members who have been granted emeritus status. Membership in the
Emeriti is an excellent way to stay in touch with friends and
acquaintances and keep informed of campus activities. Keeping in touch
is a two-way street—you should keep the Emeriti informed of your
significant activities. Contact The Emeriti Center, Pollak Library
S170. (By the way, upon your demise, your spouse may continue as an
associate member of the Emeriti, should he or she wish to do so.)
The CSUF Emeriti hold several luncheon meetings
with speakers or entertainment and one or two outings during the
academic year. Membership in the Emeriti costs $10 per year.
Information about Emeriti activities is available on the Emeriti web
site (http://www.fullerton.edu/emeriti).
CSU-ERFA (California State University Emeritus and Retired Faculty Association):
CSU-ERFA is the statewide organization of retired
faculty from the CSU. It is the only organization looking out for our
welfare with the legislators and the CSU system. The Newsletter keeps
retired faculty aware of new developments. Contact The Retiree Center,
18111 Nordhoff St., Northridge, CA 91330-8339 or 818-718-7996 for more
information. (http://csuerfa.org)
OLLI (Osher Lifelong Learning Experience):
The
Osher
Lifelong Learning Experience (formerly CLE) is an
on-campus organization housed in the Ruby Gerontology Center that is
for people aged 55 or older. OLLI has a very
active program of speakers, travel programs, and mini classes all
available at or near Fullerton at a minimal cost. Stop by the center or
call 714 278 2446 for more information.
The University Club:
The University Club is a relatively new campus
organization of faculty, staff and administrators and emeriti who
support, sponsor, and host a number of community enhancing and cultural
activities throughout the year. The University Club is an unofficial,
loosely organized group that seeks to encourage social and intellectual
interactions and strengthen the campus community. There is no cost to
join, simply contact Vince Buck (vbuck@fullerton.edu),
Reyes Fidalgo (rfidalgo@fullerton.edu)
or Tony Rimmer (trimmer@fullerton.edu)
for more information.
One last note: Our COLA (Cost of Living
Adjustment) doesn’t start until the second year of our retirement.
It cannot exceed the rate of inflation using the US City Average.
For more information go to the CalPERS websit
http://www.calpers.ca.gov
then insert COLA in the search box. That will take you to a
page with information on how the COLA is calculated.
This information is current as of March 2006.
Read the Emeriti newsletter “Emeritopics” or visit the above websites to
keep updated.
