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When you give up a regular paycheck from FirstEnergy, you’ll need to rely on your FirstEnergy pension, retirement savings, and Social Security to sustain your life and leave a legacy for your heirs.
While you may choose to continue working, most people would prefer to do that by choice, not necessity.
That’s why retirement planning is essential.
The Increasing Lifespan of Americans
Many Americans are living much longer lives.
The Society of Actuaries sponsors a Longevity Illustrator, an online tool that helps you visualize how long your money might need to last.
According to their data, for a healthy married couple both around 65 years old, there is a 50/50 chance one of them will survive into their 90s.
If you end up in a similar situation, your money has to stretch further to keep up with your lifespan.
The decisions you make as you approach retirement should balance your retirement goals while also providing sufficient income as you age.
There are many factors outside your control, such as:
- Inflation
- Stock Market Fluctuations
- Interest Rate Increases & Decreases
- Increasing Healthcare Costs
Planning for these factors and at retirement and into retirement are essential for a successful retirement.
The last thing you want to do is not take your FirstEnergy retirement benefits seriously and find yourself financially pinched when you’re least prepared to deal with it.
Fortunately, with proper planning, you can make better decisions and create the best future possible for you and your family.
Avoiding Costly Mistakes in Your FirstEnergy Retirement
One of the most common mistakes we see FirstEnergy employees make is selecting benefit options without enough research.
With a busy life, it can be hard to put aside time to research your retirement benefit options.
But you must either do it yourself or with the help of a professional.
Otherwise, you may leave significant money on the table.
Not Choosing the Right Spousal Pension Option
One common mistake is choosing a pension option without considering the potential impact on your spouse.
If you’re married, selecting the appropriate spousal pension option is crucial.
When it comes to choosing the correct pension option for you and your family, you should be considering a number of different factors.
These factors include (but are not limited to):
- Your age & health
- Your spouse’s age & health
- You and Your Spouse’s Social Security Benefits
- You and Your Spouse’s retirement savings plans
- If you or your spouse plan to continue working
To complicate matters, there are no shortage of options to choose.
Below is a graphic showing a sample list of options available to employees of FirstEnergy.
Choosing the right option will have a lasting impact on your retirement.
It’s important to make sure you’re both maximizing your benefit, while also planning to cover both you and your spouse’s life expectancy.
Improperly Choosing Your FirstEnergy Retirement Date
Another common mistake is selecting your retirement date without careful research on how it would impact your benefits.
It’s critical to know the rules of your plan.
With FirstEnergy’s plan, your pension doesn’t increase after age 60 if you are no longer working, so you want to factor that in.
However, there are 2 other rules to consider as well:
- If you retire before age 60, your retirement benefit will be reduced. You can receive your full pension by waiting until you’re 60 to begin collecting.
- Your pension will increase if you continue working past age 60, but if you retire after age 60, there is no increase in benefit if you wait until a later date to begin receiving your pension
The second point can be confusing since it’s the opposite of how Social Security Benefits work.
Avoiding Non-Reversible Errors
These mistakes are not usually reversible. Once you make a decision, you have to live with the consequences.
It’s a good idea to educate yourself on the options available, and consider which of the pension benefit options make sense for your retirement.
Take your time researching, ideally with professional help, to make the best possible decision for your financial situation.
Your FirstEnergy pension benefit is likely to make up a significant part of your retirement income plan.
Thankfully, the benefit is a guaranteed benefit and will provide some level of stability for your retirement.
But an improper pension benefit election can be the difference of tens of thousands (or more) of dollars.
Worse yet, you could be putting undue financial stress on your spouse in the event of an untimely death.
Additional Resources
If you haven’t already done so, you should use the online FirstEnergy Your Pension Resource Tool to run retirement projections to better understand the impact of your choices.
Additionally, we’ve created a guide to help you avoid the 5 most common mistakes when planning your FirstEnergy retirement. We also have a recorded webinar which goes through the ways to best plan and avoid these mistakes.
If you’re ready to begin planning for your FirstEnergy retirement, we welcome you to begin the process by getting your free financial assessment. By working with a team of professionals who understand both the FirstEnergy pension system and your goals and desires for retirement, you can rest easy knowing your retirement is secure.