5 Tips for People Who Will Retire in 2017

Retirement is a major life transition that involves financial and social changes. New retirees also need to sign up for Social Security and Medicare at the appropriate ages. Here are some of the important decisions you need to make in the year you retire.

[Read: 5 New 401(k) and IRA Rules for 2017.]

Consider rolling over your 401(k). You can often leave your retirement savings in your former employer's 401(k) plan or move your money to an individual retirement account. The better option depends on the quality of your 401(k) plan. "An IRA gives you the whole investment world full of choices, so generally it is a good idea to move to an IRA," says Cheryl Costa, a certified financial planner and principal of Woodside Wealth Management in Framingham, Massachusetts. "Look at how expensive the [401(k)] plan is. If it has reasonable fees and a broad range of investment choices, you might want to consider leaving it where it is." Consolidating several 401(k)s from former employers into a single IRA can make it easier to manage your investments. You can also shop around for an IRA with low-cost funds, which will help your nest egg last longer.

Remember required minimum distributions. Withdrawals from retirement accounts are required each year after age 70 1/2. "You want to take out at least the required amount because you get penalized if you don't," says Daniel Wrenne, a certified financial planner for Wrenne Financial Planning in Lexington, Kentucky. The penalty for missing a 401(k) or IRA distribution is 50 percent of the amount that should have been withdrawn in addition to the income tax due. Your first RMD is due by April 1 of the year after you turn 70 1/2. Subsequent RMDs are due by Dec. 31 each year.

[Read: Tax Breaks for People Over 50.]

Sign up for Medicare on time. You initially become eligible for Medicare during the seven-month period around your 65th birthday. It's import to sign up during this initial enrollment period, because a permanent penalty could be added to your Medicare Part B and Part D premiums for late enrollment. If you work past age 65 and receive group health insurance through your job, sign up for Medicare within eight months of retirement or the coverage ending to avoid the premium penalty. If you retire before age 65, you will need to purchase health insurance from another source. "The employer plan may extend coverage, but if not, then you might want to look at getting an individual policy," says Teri Alexander, a certified financial planner for Alexander Financial Planning in Columbus, Ohio. "You can do that by working with a broker or going to the exchange."

Decide when to claim Social Security. Your Social Security benefit changes depending on your age when you sign up. Payments are reduced if you start your benefit before your full retirement age, which is 66 for most baby boomers. You can boost your Social Security payments by delaying claiming past your full retirement age up until age 70. "For every year that you delay, you are increasing your benefit by 8 percent," Alexander says. "If you are healthy and think you are going to live a long time, then you should delay your Social Security."

[See: 10 Social Security Rules Everyone Should Know.]

Determine when to leave your job. It's fun to dream about announcing you won't be coming into work anymore. But the identity and social life your career provides can be difficult to leave behind. Working for just one extra year can also improve your finances. "Don't pull the trigger on retirement until you are sure and know where your money is going to come from and how much you are going to spend," Costa says. "Working an extra year, even on a part-time basis, can really increase the longevity of the portfolio."

Emily Brandon is the author of "Pensionless: The 10-Step Solution for a Stress-Free Retirement."