What does it take to create a successful retirement plan and put it into place? Planning is essential. Employees must understand health insurance benefits and limitations, how to transfer 401(k) funds to a personal Individual Retirement Account (IRA) and the procedures for collecting benefits from company sponsored retirement plans.

Employers must comply with laws when coordination of benefits takes place between Medicare and employer-sponsored health insurance plans. There are several situations to consider.

First, will the retiring employee be eligible for Medicare? If so, then under most circumstances, that employee will leave your company sponsored plan. It might be possible for the retiring employee to continue with the company plan under the Consolidated Omnibus Benefits Reconciliation Act  — https://www.dol.gov/general/topic/health-plans/cobra — or another option called continuation.

Second, will the employee continue to work for your company for some period after becoming eligible for Medicare? In this situation, you will have to deal with coordination of benefits between two or more payers — Medicare and your company health insurance provider, for example, Generally, company insurance pays first and Medicare covers any additional eligible costs. Employers have been known to offer Medicare-eligible employees a cash incentive to get the employee to drop out of the company sponsored insurance plan. This might or might not be legal. Always consult appropriate legal, benefits or other advisors. Visit the Medicare website located at https://www.medicare.gov/publications/02179-how-medicare-works-with-other-insurance.pdf.

Finally, even if the soon-to-be retiring employee stays on the company insurance plan, they need to enroll in Medicare during the months just before or just after their 65th birthday or risk additional costs or difficulty obtaining some or all of their Medicare, Medicare Supplement, Medicare Advantage and prescription drug plan coverages.

The retiring employee’s 401(k) or similar plan can usually be transferred from the company plan to the employee’s IRA. Your plan management personnel should provide the employee with instructions on how to perform this transfer and any important considerations should the employee choose to leave the 401(k) with the employer’s plan.

For many employees, their 401(k) investment is one of their largest sources of retirement income. Many 401(k) advisors will conduct an information session about the many considerations for transferring and accessing these funds, including explaining current investments. Using this service could reduce your risk of violating fiduciary requirements while providing a valuable benefit to employees. Consult appropriate legal, benefits and other advisors.

Your company could be one of the few smaller businesses that provide a defined benefit or defined contribution plan. For most employees, the features and limitations of these plans remain a mystery. Explaining how to access these funds and what the options are  — continuing payments to a spouse in the event the employee dies first, for example — offers a valuable service to help retiring employees.

Retirement is an exciting, but intimidating, time for many people. Most employees know little about the planning process. Bringing in your company’s legal, benefits and other advisors to explain the process offers a tremendous service.

Author’s note: This is my final column for the Business Times. It’s retirement time. I wish everyone continued success.