Midflorida Credit Union maps retirement income planning

How long before retiring should retirement income planning start?

Retirement income planning should begin 10 to 15 years before your last shift; Cedric's large pre-tax 403(b), more than 10 times his pension, showed why early contribution choices can reduce later RMD, tax-bracket, and Medicare-premium pressure once work pay stops.

Cedric is a hypothetical 66-year-old widowed sonographer. His modest pension covers part of his bills, but his $750K traditional 403(b) will shape his taxable income for years. Because he put 100% of his savings into pre-tax accounts, he has only 9 years, from age 66 to 75, to change the mix before required minimum distributions begin.

A nurse at 52 has choices Cedric did not use. The IRS limit for 2026 lets you defer $24,500 to a 403(b), plus $8,000 from age 50. At ages 60 through 63, the catch-up is $11,250. If prior-year FICA wages exceeded $150K, the IRS requires that catch-up to go into Roth contributions.

Once your pre-tax 403(b) is more than 10 times your annual pension, sketch the retirement paycheck at least 10 years before your last shift. Midflorida Credit Union keeps the paycheck coming from as few accounts as practical, often 1 pre-tax account and 1 Roth account, so you can explain the arrangement to family in a minute.

Midflorida Credit Union's 1-page roadmap and yearly paycheck schedule

Cedric wanted a short document his daughter could read without sorting through account statements. The roadmap names each income source, the monthly amount, and the account that sends it. It is a working document, not a binder that sits unopened for years.

The schedule is built around the dates that can change the numbers. A fall review matters because a Roth conversion or a family gift can affect Medicare premiums 2 years later.

• After the first review: a 1-page roadmap with each income source, monthly amount, and paying account.
• Each January: a paycheck schedule with the 403(b) transfer amount and federal withholding set at the custodian.
• Each fall: MAGI is totaled before a Roth conversion or year-end gift, then compared with the next IRMAA line and tax bracket.
• After every review: an updated 1-page roadmap. No binders.

What age do RMDs, Medicare and full Social Security arrive?

Cedric does not have RMDs until 75 because he was born in 1960, while Medicare began at 65 and his full Social Security retirement age is 67. Those dates create a short window to set his paycheck and test conversions before forced 403(b) distributions begin.

RMDs, or required minimum distributions, begin at 73 for many people and at 75 for people born in 1960 or later. Pension payments and traditional 403(b) money count as ordinary income in the year received. The IRS standard deduction for 2026 is $16,100 for a single filer; check the current IRS figure for the extra amount available at age 65 or older.

For people born in 1960 or later, the SSA says full retirement age is 67. Claiming at 62 reduces the monthly benefit by 30%. IRS rules can make up to 85% of Social Security benefits federally taxable, depending on provisional income.

Medicare begins at 65, and CMS sets IRMAA, the higher-income Medicare surcharge, using MAGI from 2 years earlier. For 2026, the standard Part B premium is $202.90 monthly up to $109,000 single MAGI or $218,000 joint MAGI. The next single tier is $284.10 monthly.

How much can a December gift add to Medicare premiums?

Cedric and a former coworker show how a December gift can add $974.40 annually to Part B premiums 2 years later (hypothetical, round numbers). Both have the same income and give $6K to a grandchild, but Cedric re-totaled his income before completing a planned $40K Roth conversion.

Each man has a $14,400 pension, $28,800 of Social Security, and a $750K traditional 403(b). In the year they turn 67, each plans a $40K conversion. Both fund the $6K grandchild gift by raising the 403(b) paycheck from $30K to $36K. The gift itself is not taxable income; the added 403(b) distribution is.

The IRS calculation begins with taxable Social Security: 85% × $28,800 = $24,480. The coworker's MAGI is then $14,400 pension + $36,000 403(b) paycheck + $40,000 conversion + $24,480 taxable Social Security = $114,880. That is $5,880 above the $109,000 single IRMAA line.

CMS lists his Part B premium 2 years later at $284.10 monthly rather than $202.90. The difference is $81.20 monthly. $81.20 × 12 months = $974.40 annually.

Cedric pauses before signing the conversion instruction and cuts it by $6K: $14,400 + $36,000 + $34,000 + $24,480 = $108,880 MAGI. That keeps him $120 under the line. He converts the other $6K in a later year, but only one whose own MAGI leaves at least $6K of room under that year's line. Otherwise he would pay the surcharge two years after that year.

Look at the two columns in the table: only the trimmed conversion keeps Cedric at the standard $202.90 Part B premium. Someone in their 50s has another option. A Roth account or a cash reserve built now can pay for a gift later without adding a dollar to pre-tax income.

The figures get redone at every review because tax, IRMAA, and Social Security figures change. A 403(b) can lose value and end below what you put in, so no yearly amount is a promise.

The $5,880 Medicare line

Why moving $6K can work

Who handles the 1099-R, the will and the math

Cedric calls us before a big gift or purchase and sends his pension and 403(b) statements. Midflorida Credit Union totals MAGI, sets paycheck amounts, and writes the roadmap. Your CPA prepares and files your taxes and checks estimated payments. Your attorney updates the will and powers of attorney. The custodian or plan administrator moves the money, withholds federal tax, and mails IRS Form 1099-R early each year, usually by January 31.

15+ years out and still saving

Cedric's retirement paycheck is useful now, but someone more than 15 years from retirement usually does not need one yet. Request a pension estimate from the plan administrator, download your Social Security estimate, and raise 403(b) contributions toward the catch-up limit starting at 50. Keep account choices simple while you are still building the balance; a detailed monthly payment schedule can wait.

Bring the numbers behind your retirement paycheck

Bring your latest pension estimate letter, every 403(b) and 457(b) statement, your Social Security estimate, your most recent federal return, and any Medicare premium notice. Cedric also writes down the $500 monthly support he sends his grandchild. Regular family help can change a withdrawal decision as much as a conversion does.

In the first meeting we go through your monthly spending, the years you need to cover before Social Security starts, and which IRMAA income lines matter for your filing status. Midflorida Credit Union meets by video or phone once your request comes in. Before you decide anything, you get a written quote showing what the work would cost for your situation.

This service does not take the place of a CPA's tax filing or an attorney's estate documents. States treat pension and 403(b) income differently, so confirm how your state taxes it. Midflorida Credit Union asks for at least $500K in investable assets. As of 10/19/2026, Midflorida Credit Union serves 535,000 clients with $5.8 billion in client assets.