12 things to include on your pre-retirement checklist
Before going on a long trip, you make a checklist so that you don’t forget anything. It can be aggravating to get to the beach only to realize you forgot the sunscreen or your bathing suit. The same sort of planning can help in preparing for retirement. The list may even provide a means to prevent you from panicking or it may serve as a reality check. Before going on a long trip, you make a checklist so that you don’t forget anything. It can be aggravating to get to the beach only to realize you forgot the sunscreen or your bathing suit. The same sort of planning can help in preparing for retirement. The list may even provide a means to prevent you from panicking or it may serve as a reality check.
- Get one time expenses out of the way while you still have an income. That roof your house needs or a major remodel can help you determine if you need to work a bit more before you retire and will prevent you from having to worry about the expenses when paying for them would mean taking more out of a retirement account (and potentially paying higher taxes as a result).
- Max out your retirement accounts. By now you should have paid off your home and other debt so an opportunity exists to put more money aside while you still have income and the money can grow
- Test drive your retirement budget. The last year of your working life is a great time to discover if you can live on what you’ll have coming in once you retire.
- Start a health regimen. You shouldn’t wait until retirement to do this but if you’ve postponed it this long it’s time to visit your doctor and figure out what you’ll need to live a healthy life in retirement. By getting in the habit of being healthy now, you’ll find it easier to stay on track later on. Your health is your greatest asset and protecting it will protect both your housing choices and your finances later on.
- Simplify your financial world. If you’ve worked several jobs and your spouse has worked several jobs, between the two of you you’ve probably opened retirement plans and other financial tools in multiple areas. Make it easier to keep track of them by consolidating them. Placing everything in fewer baskets will also potentially lower your fees and make it easier if one or the other of you passes away.
- Look at part-time income opportunities. If you are considering working even for a little while in retirement you want to do it while you are still in the game. Going part-time may also eliminate enough stress or give you enough free time to take the pressure off from wanting to quit now.
- Decide when to take Social Security. It’s usually not the best option to begin taking Social Security right away. Since Social Security benefits grow at 8 percent per year after age 66, putting off collecting on it right away can pad your future income.
- Analyze your investment risk. Retirement is a good time to consider backing off on some of your investment risk. As the recent financial crisis showed, a downturn in the economy just before retirement or during retirement can cost you dearly.
- Update your legal documents. Any major change in your life should cause you to look at what sorts of Wills, Trusts, Powers of Attorneys etc you have and whether they need to be changed. Beneficiary changes to insurance policies and retirement plans should also be update. Make sure your beneficiaries know where the documents are in case something happens to you.
- Go over your benefits with the Human Resource Department. Make sure you understand things like healthcare plans you may still be eligible for.
- Plan what you will do. Whether you intend to work, travel, volunteer or spend time with hobbies, make sure you have a plan for that extra time you have so it doesn’t go down the drain.
- Have a family meeting. It’s time to sit down and have that discussion with family about what aging means to you. Your family deserves to know how you want to live and die and what’s important in this last few decades of your life so if you come to some critical juncture, they aren’t in the dark about your wishes and plans.
If you still have questions about whether you’re ready for retirement (and even if you don’t) you should consider hiring a financial planner. A financial planner can take a look at your specific situation and help you figure out not only whether or not you’ve saved enough but also help you with timing your benefits in order to reduce your taxes and stretch your retirement dollars.