Retirement Assets You Might Be Overlooking When Building Your Income Plan

Your retirement income plan may be missing assets you already own. An old workplace account, an unused life insurance policy or savings bonds tucked into a drawer, for example, could help cover expenses without requiring you to save another dollar first.

Finding those assets is only the beginning. You also need to understand what each one can provide, what accessing it costs and whether using it would weaken another part of your plan.

Before assuming your savings must stretch further, take a closer look at the following retirement assets you might be overlooking.

Old Workplace Plans

A job you left years ago could still hold part of your retirement savings. Old 401(k) accounts and pension benefits are easy to lose track of after company mergers, address changes or several career moves.

Start with former employers, old statements and benefits paperwork. Even an account that looks small deserves attention, especially if you have several scattered across different providers.

The US Department of Labor established its Retirement Savings Lost and Found Database to help people locate retirement benefits. For you, that creates another starting point when an employer has changed names or its benefits contact information is missing.

Finding an account does not mean you should immediately cash it out. Compare its fees, investment options and withdrawal rules before deciding whether to leave it alone or arrange a rollover.

Pension benefits deserve a separate review. Ask whether you qualify for future payments and what choosing a survivor benefit would mean for your household.

Life Insurance You No Longer Need

Life insurance can become an overlooked asset when its original purpose changes. A policy purchased to protect young children or cover a mortgage may play a different role once your children are independent and your home is paid off.

A life settlement involves selling an existing policy to a third party for more than its cash surrender value but less than its net death benefit. The buyer takes over future premium payments and receives the death benefit when the insured person dies.

Before choosing between keeping, surrendering or selling a policy, review these details:

• The protection your beneficiaries still need
• The premiums required to maintain coverage
• The amount available through each option

Use a policy value calculator to help you see if your policy qualifies and how much you could receive. You could get up to eight times the cash surrender value. 

Selling also means giving up the policy’s death benefit. Ask a qualified adviser about taxes, transaction costs and any effect on means-tested benefits before committing.

Home Equity

Your home may represent a substantial share of your wealth without contributing anything to your checking account. Equity becomes useful for retirement spending only when you have a workable way to access it.

If your plan leaves housing wealth untouched, consider whether that reflects a deliberate choice or an option you have not evaluated.

Downsizing offers one possible route. Selling a larger property and buying something less expensive could release funds while reducing maintenance expenses.

Focus on the net result, not the sale price. Moving costs, selling expenses and the price of your next home can absorb much of the apparent gain.

Remaining in place may still be the better choice. Any borrowing strategy needs careful review because interest, fees and ongoing ownership costs can affect what remains available later.

Health Savings Accounts With Long Term Potential

A health savings account can be more than a place to park money for next year’s prescriptions. Unused balances carry forward, allowing an existing HSA to remain useful after you stop working.

HSA withdrawals for qualified medical expenses can be tax-free. For your retirement budget, that means eligible healthcare bills may be paid without adding taxable income from those withdrawals.

After age 65, nonmedical withdrawals are no longer subject to the additional 20% tax, although ordinary income tax still applies. Medical and nonmedical spending therefore deserve different treatment in your withdrawal plan.

Old Receipts With Future Value

Past medical expenses may also matter if you paid them yourself after establishing your HSA. Eligible expenses that were never reimbursed could support a later tax-free reimbursement, provided you meet the rules and retain adequate records.

Check receipts, insurance statements and previous reimbursements before counting that money. An expense cannot support another reimbursement if it has already been reimbursed or otherwise used in a disallowed way.

Savings Bonds Sitting Outside Your Accounts

Paper savings bonds can disappear from view even when you carefully monitor your investment accounts. They might be stored with family documents, tucked into a safe or left among inherited paperwork.

Check each bond’s series, issue date and ownership details. Series EE and I savings bonds have interest-bearing lives of up to 30 years, so older bonds may have stopped earning interest.

For a retiree, a matured bond is worth reviewing because leaving it untouched does not create additional interest income. Its redemption value could instead support a planned expense or become part of your cash reserve.

Avoid treating the entire redemption amount as spendable until you understand the tax treatment. Accumulated interest may create a tax bill, depending on how it has been reported.

Inherited bonds also require attention to ownership and redemption procedures. Confirm what you can access before including their value in your income projections.

Giving Every Retirement Asset a Clear Role

Overlooked retirement assets are most useful when each has a defined job. An old account might support regular withdrawals, while a policy settlement or redeemed bond could help meet a specific expense.

Build one inventory showing ownership, estimated value, access costs and any protections you would lose. Then review how the pieces fit together before making irreversible decisions.

Hopefully this article has been helpful in enabling you to consider the retirement assets that you may be overlooking. Even if you only have one or two of the above options, they can be incredibly helpful for building your income plan and ensuring a smooth retirement.

And if this article has been helpful, take a moment to explore some of our other insightful content.