Avoiding Retirement Pitfalls — Common Mistakes Eastman Retirees Make With Their Benefits
Brandon Renfro
For Eastman employees in Longview, retirement benefits are generous — a pension, a 401(k) with company match and RSC, and access to strong healthcare options. But the value of these benefits depends on the choices you make with them. Over the years, we’ve seen common mistakes that cost retirees peace of mind, tax efficiency, and in some cases, significant dollars.
Here are the pitfalls Eastman retirees should watch for — and how to avoid them.
Mistake #1: Taking the Pension Without Weighing All Options
One of the most important decisions you’ll face is whether to take your pension as a lump sum or as monthly lifetime income.
The pitfall: Retirees sometimes default to whichever option feels easiest, without evaluating how it fits into their broader plan. Some choose the lump sum and underestimate the risks of managing the money. Others take the monthly pension and later wish they had the flexibility of a lump sum.
How to avoid it: Run side-by-side comparisons that factor in interest rates, your health, life expectancy, survivor needs, and tax considerations. The best choice is the one that fits your specific circumstances, not a one-size-fits-all answer.
Mistake #2: Mishandling the 401(k) Rollover
Eastman’s 401(k) is a major asset, and many retirees roll it into an IRA when they leave. Done properly, that can be a smart move. But mistakes here can be costly.
The pitfall: Some retirees take the 401(k) as a cash payout instead of a direct rollover, triggering immediate taxes — and sometimes penalties if they’re under 59½. Others fail to coordinate Roth and traditional balances, creating unexpected tax issues down the road.
How to avoid it: Always use a direct rollover into an IRA, and coordinate your withdrawals to cover your budget in the most tax efficient manner.
Mistake #3: Claiming Social Security Too Early Without a Plan
Social Security can be claimed as early as 62, but doing so reduces your lifetime monthly benefit.
The pitfall: Many retirees claim early because they worry about “getting their money’s worth,” without considering how a reduced benefit might affect their long-term income security. Many misunderstand Social Security funding and misinterpret what it means for Social Security to run out of money.
How to avoid it: Consider all of your income sources together. Sometimes using your 401(k) or pension for a few years is a better move that can allow you to delay Social Security, resulting in a much higher monthly benefit for life.
Mistake #4: Overlooking Healthcare Costs Before Medicare
If you retire before 65, you’ll need to bridge the gap until Medicare starts.
The pitfall: Some retirees underestimate or overestimate how expensive private insurance will be. This leads to unpleasant surprises and added financial stress in the early years of retirement. Or, it can cause people to work longer than they reasonably have to.
How to avoid it: Factor healthcare costs into your retirement budget from the start. Explore options through the Marketplace, spousal coverage, or part-time work benefits so you know the actual cost. Don’t just rely on rules of thumb and water-cooler “wisdom”.
Mistake #5: Neglecting Estate and Beneficiary Planning
You’ve worked hard to build retirement savings — but without careful planning, assets may not pass the way you intend.
The pitfall: Failing to update beneficiary designations on your 401(k) or IRA, or relying solely on a will without considering how retirement accounts bypass probate.
How to avoid it: Review and update beneficiaries regularly. Consider how your pension’s survivor options, your 401(k) rollover, and your estate plan fit together to ensure your assets go where you want.
Pulling It All Together
Retirement at Eastman comes with strong benefits, but no benefit is foolproof if not handled carefully. The most common pitfalls stem from treating each decision in isolation: pension here, 401(k) there, Social Security at some other time.
The truth is, these decisions are interconnected. Your pension choice impacts your tax strategy. Your 401(k) rollover affects when you might claim Social Security. Your healthcare planning influences when you can retire with confidence. Avoiding costly mistakes isn’t simply about knowing all the rules — it’s about seeing how the pieces of your retirement fit together.
