Retirement: Some General Reminders and Guidelines for Corning Retirement

I recently received a text from a "fresh" retiree about some of the hiccups during his retirement transition. I'm writing this note without knowing if I can recall enough about my own transition, but I'm giving it a try.

IMPORTANT! As time passes, what's written below will no longer be accurate. By now we know change is a fact of life. You should verify for yourself what the current policies and procedures are. I found the retirement advisors to be very knowledgeable and helpful. You can call them, and exchange messages with them via their website.

Your Pension

• If you were hired before year 2000 or so (I don't remember the exact year), you could be on the old pension plan entirely, or be in a hybrid situation where you have both the old and new pension plans.

• In my specific case, I was on the old pension plan, however I did have a bit of money in the new pension plan. I don't recall how this happened.

• Old pension plan:

  • Cannot be taken as a lump sum.
  • Your 401k match was limited to 5%.
  • You must choose to receive 100% of your pension (monthly), or choose to split your pension for your spouse. If you select a split, your monthly pension will be reduced, but your spouse will continue to receive that reduced pension after you pass away.

• New pension plan:

  • Can be taken as a lump sum. You'll need to pay taxes or roll this into an IRA.
  • Your 401k match was limited to 6%.
  • You need to select the same spouse split option if you choose monthly payments.

• If you receiving monthly pension checks, you'll have to decide what taxes you want withheld from each check. This is done when sign up for retirement.

• You can delay when your pension starts, but it won't increase future checks. Therefore it makes no sense to delay.

Pre-65 Corning Retiree Health Insurance

• Cost is determined by years of service.
• 30 or more years of service? As I write this, cost is a little over $500 per month per adult. Less years of service means you'll pay more. I don't know what including a dependent costs.
• Dental and vision coverage is not included.
• If you have a pension, and it's substantially more than the cost of this insurance, you can have the monthly premiums deducted from your pension. Took me about 2 months to figure this out.
• If you left Corning and were rehired, you need to check the cost. If you're close to Medicare age, it may be cheaper to use COBRA instead.

Medicare Age and Still Working

• You don't have to sign up for Medicare at this time.
• You can sign up for Medicare, but you will no longer be able to contribute to an HSA.
• Corning can provide forms to show proof of previous coverage when you sign up for Medicare later (when you retire).
• As long as you're working, you don't need Medicare gap insurance, drug insurance, etc.

Picking Your Retirement Date

• The first few months or retirement are unsettling. Have some cash saved for this period.

• If you retire on the last day of the month:

  • Your Corning benefits end at that time. You will need health insurance immediately the following month.
  • Your pension starts immediately, however you will not receive your first check until the start of your 2nd month of retirement. You will actually receive 2 pension checks. One will be for your first month of retirement, and it will be slightly higher because some interest will be added for the one-month delay. The other check will be for retirement month number 2.

• If you retire during a month:

  • You'll continue to have Corning benefits for that month. You'll need health insurance starting the following month.
  • You won't receive any part of your pension for the balance of the month.
  • Your first pension check should arrive at the beginning of your first full month of retirement.

Transition to Medicare

• Retirement means no more "employee and spouse" or "family" coverage. Everyone is an individual who makes their own choices.

• You're going to have to decide whether you'll use traditional Medicare (Part A, Part B, Gap plan, Drug plan), or Medicate Advantage (Part A and Part C).

• I don't feel like I can say much about Medicare Advantage. I went with traditional Medicare.

• If you were hired before 2007, you may be eligible for Corning Retiree Reimbursement Account (RRA) funds. You should check on this because it determines how to approach Medicare sign-up.

• Yes you're eligible for the RRA:

  • My RRA is $1,350 per person, which can be used to offset the cost of Gap insurance and drug plan coverage.
  • You must use AARP/United Health Care.
  • I don't know how these funds are accessed if you use Medicare Advantage.
  • You cannot use a Medicare broker (someone who calls you, sends you a post card, or comes to your home - pitching that they can help you sign up for Medicare.)
  • You must sign up for your Medicare gap plan, and your drug plan, here: https://www.myuhcplans.com/corning
  • In my case, they draft a bank account each month for my payment, then I receive a direct deposit for that amount from the RRA. (Handled by some 3rd party company.)
  • Initially, the cost of my gap plan is less than $1,350 a year. Add the cost of the drug plan and now I exceed $1,350 a year. These costs will go up. When the cost of my gap plan exceeds $1,350 a year, I may start shopping for my drug plan on the open market, which I can do each Fall. It won't need to be with AARP/UHC because the RRA will no longer be covering it.

• Not eligible for the RRA:

  • You can use a Medicare broker to help you find the best deal.
  • If you have a financial advisor, they may have someone they can recommend.
  • There are many brokers doing YouTube videos that are quite helpful.

• A retiree reminded me that the RRA is not a pension and could be taken away someday.

• Choosing your Gap plan:

  • YouTube is your friend here. There's a lot of educational material on this subject.
  • Changing this decision later can be difficult. Some states make changing easy. Other states not so much. After your Medicare initial sign-up period, you might not be able to change due to your medical condition. The insurer you want to change to might decline to cover you.
  • For me the choices boiled down to Plan N or Plan G. It's almost a coin toss.

• Choosing your drug plan (Part D):

  • Even if you take no prescription medications, you should sign up for a cheap drug plan. Why? Because if you don't sign up during your special sign-up window, then decide to sign-up later, you will be penalized forever. Your cost will be higher every month due to this penalty.
  • Both Medicare.gov and the AARP/UHC site have systems where you can enter the prescription drugs you're taking, and they will provide a list of possible drug plans and costs.
  • You should be able to change your drug plan every year during the annual enrollment period.
  • My mail-order drugs switched from Caremark to Optum RX. You have to let your doctor/prescriber know, and manage this transition so you don't run out of your medications.