7 Retirement Decisions that Affect the Rest of Your Life

These retirement choices determine how financially secure you will be in retirement.

These common retirement planning mistakes will hurt you in the long run
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Meeting Medicare's deadlines. The standard Medicare Part B premium is $104.90 per month in 2013 for all retirees who earn less than $85,000 ($170,000 for couples). To pay this premium, you need to sign up for Medicare during the seven-month initial enrollment period that begins three months before you turn 65 and lasts until three months after your 65th birthday. If you sign up later, your Part B premiums will increase by 10 percent for each 12-month period of delay. "If you do not sign up during your initial eligibility period and you sign up later on, there is a penalty that you have to pay that stays with you the rest of your time you have Medicare," says Nicole Duritz, vice president for health and family at AARP. If you or your spouse is covered by a group health plan due to your current employment, you need to sign up within eight months of leaving the job or the coverage ending to avoid paying higher premiums.

[Read: How to Retire With $1 Million.]

The age you retire. The age you retire has a huge impact on how much money you can safely spend each year. If you retire at 65 and live until 95, your retirement savings need to provide enough income to finance 30 years of retirement. If you delay retirement until age 70 and live the same number of years, you will only need to pay for 25 years of retirement beyond what Social Security provides. Even a part-time job can allow you to draw down your savings more slowly. "For a lot of people, the definition of retirement is not 'not working,' but not doing what they don't like and doing some kind of work that they love," says Christopher Jones, a certified financial planner for Sparrow Wealth Management in Las Vegas.

Remembering to take required minimum distributions. Beginning after age 70½, you are required to take withdrawals from traditional retirement accounts. People who fail to withdraw the correct amount could incur a stiff 50 percent tax penalty on the amount that should have been withdrawn in addition to regular income tax on the withdrawal. A worker in the 15 percent tax bracket who misses a $5,000 401(k) withdrawal could incur a tax penalty of $3,250, including the 50 percent penalty and 15 percent regular income tax. If he had instead taken the distribution, he would have paid $750 in regular income tax on the withdrawal.