Countdown to Retirement: A Checklist

Countdown to Retirement: A Checklist

If you are counting down the days until you can launch into the next stage of your life – retirement – this checklist can serve as a helpful guide.
Your Countdown to Retirement Checklist
In the past, many people thought of retirement as a time of life when things slowed down. Now, retirement is more of a blast off into a new stage of life. The new experiences of retirement require an even greater need for a strong plan. Whether or not you’ll be ready for retirement in the future depends on how much planning you take care of now. If you wait until it’s too late, you might not be able to make adjustments that can dramatically improve your lifestyle.Even if you’ve got a strong retirement portfolio – and you feel ready for the next stage of your life – chances are you’ve overlooked at least a thing or two. There are likely aspects of your plan that could use a little tweaking.

If you take care of these 10 things now, you may be more likely to enjoy a relaxing retirement later.

10. Figure Out What Retirement Really Means

Most people dream of retirement.  But the word “retirement” means really different things to different people.  And the way we retire is usually more of a transition than a single event.  Additionally, retirement can now last 30 or more years. As a result, there are different stages and phases of this time of life.

As you countdown to retirement, you might consider what retirement really entails.  Here are a few considerations:

Social Security

For some people, retirement means the start of Social Security benefits.  However, you can keep working even if you start Social Security.  You can also stop working – and still delay starting benefits – to maximize your monthly payments. Use this Social Security Calculator to figure out the best time for you to start your benefits.

Quitting Your Job

The most common idea of what retirement means is when you quit a job that you have had for a long period of time.  However, many people quit their job then go on to second and third careers.  Others pursue a part-time, lower stress gig.  Some people even take a sabbatical as a trial retirement.

Starting Medicare

At age 65, you can enroll in Medicare benefits.  This can sometimes liberate you from your job.  Just be sure to enroll in the best possible Medicare Supplemental Insurance.  Out-of-pocket medical expenses can be very expensive!

Phases of Retirement

Usually, the first few years of retirement are active with social and leisure pursuits, volunteering, socialization, travel, or retirement jobs. The second phase is a slower period of life – more focused on home and family.  And the third phase is marked by dealing with health concerns. When you retire, consider which phase you are retiring into.

9. Decide What You Want to Do in Retirement

Deciding how to spend your time in retirement is something that isn’t covered on very many retirement checklists.  According to a Fidelity study about why people decide to retire, 64% of retirees said that stress at work contributed to their decision to leave the workforce.  While some people love their jobs, clearly not everyone does.

However, retirement should be more than just about getting away from something.  You might know you want to leave work, but you should also consider what you do want to do. Retirees seem happiest when they have a passion to pursue or some other specific purpose in their life.

Deciding what you want to do after work should be an important part of your retirement planning process.

Volunteering, spending time with grandchildren, travel and – believe it or not – starting a new career are all popular options for what to do in retirement.

8. Create a Detailed Retirement Plan With a Financial Planner

Your retirement security hinges on how much income you’ll need and how well you’ll be able to supply it. Some retirees move into this next phase of life only to learn that their needs exceed what they’d planned for. That means scaling back in a big way, and it can put a big damper on the lifestyle that you’d hoped for.

When you seriously examine your retirement savings path early enough, you can make adjustments if necessary. In just a few simple steps, the NewRetirement Retirement Calculator can help you determine where you are now. If there’s a shortcoming, you’ll also find sound suggestions for strengthening your retirement plan.

Some people prefer to go it alone, and that’s perfectly fine. But talking with a retirement financial planner at least once can help you understand all of the options that are available to you. You probably know how to manage your 401(k) or IRA. But an expert often has suggestions that can help you improve.  Here are some of the most common mistakes that a professional adviser finds in a typical retirement plan:

    • Lacking a solid goal
    • Procrastination
    • Owing too much on a mortgage
    • Misinformation about employer-sponsored savings
    • Lacking a strong tax strategy
    • Not consolidating your retirement savings accounts
    • Saving for kids’ college and neglecting your retirement

If you take charge of your retirement early, the surprises that pop up along the way will have less of an effect. And they won’t derail the rest of your life.

7. Adjust the Levers to Improve Your Retirement Financial Prospects

Retirement planning is not something that you do once for 10 minutes.  Retirement planning should be an ongoing process. Luckily there are a lot of different levels that you can adjust as you discover more about what you have and what you will need in the future.

Here are a few things you can adjust that might have a big impact:

Your Retirement Date

Many people find that if they delay their retirement by a month, one year or two years, they suddenly go from can’t retire, to retiring in style.

Social Security

If you’ve asked the question “When should I start Social Security?” and have been a little unsure about the answer, you’re in good company. Setting the right time to take Social Security benefits is one of the most difficult decisions that you’ll make.

You can start receiving your Social Security retirement benefits as early as age 62. But you should be aware of the drawbacks. Early benefits come with a cut that’s permanent. If you delay taking your benefits from your full retirement age up to age 70, your benefit amount will increase. Plus, that increase is permanent.

Accelerate Savings

If you are a few years out from retirement, you have time to save a lot more.  Even if you did not save enough earlier, you can still sock away a lot now.

Cut Your Budget

When you cut your expenses in retirement, you need less in savings.

Figure Out Where to Live

Choosing the best place to retire can be a financial decision or a lifestyle choice (or both).  For most households, housing is their biggest cost and their largest asset.  Therefore, where you live can be a significant factor in determining your financial security and happiness.

6. Determine Your Savings Drawdown Strategy

Whether you have scrimped and saved (or not), the retirement planning game changes significantly as you approach retirement.  Instead of saving money, now is the time to figure out how to withdraw your savings.

And, finally, to use your money in a way that lasts your lifetime. Figuring out how to spend the money is complicated and takes some calculating.

5. Think About Estate Planning

As if figuring out your plans for retirement were not enough work, you also need to assess your estate plan.  Estate plans need to be monitored in every big financial shift. For most people, retirement is the biggest financial shift they will experience.

For many people, a will is all that’s needed. For others, estate planning requires a multifaceted approach in order to guarantee that your assets and beneficiaries are protected. If all that you need is a will, you might be able to manage that on your own.

But unless your estate is quite simple, talking with an attorney can help you avoid tax issues and spot problems that you might not realize exist. PlannerPlus subscribers can see annual estimates for federal, state, and capital gains taxes, review annual taxable income as well as realized capital gains and specify itemized deductions and property taxes.

If you already have a will, think about how long it’s been since it was drafted. Maybe life doesn’t seem to have changed much. But if it has – and you need a new will or a new provision in your existing one – now is the time to find out.

4. Get a Home Inspection

You won’t find this item on every retirement checklist. However, owning a safe, sound, and healthy home with as few problems as possible is what you should aim for in retirement. (If you have your mortgage paid off completely, even better!)

Unless you’re an expert in the home construction industry, you might not spot small problems that could creep up and turn into major expenses later. Getting a home inspection is a great investment, and it’s best done before you retire.

For a few hundred dollars, an inspector might tell you that your home is in great condition. Or they may point out issues that need attention; for example, even if your roof isn’t leaking, it might be wearing out. The same thing might be true for your water heater, kitchen range, or any other major home investments. An inspection can also alert you to safety issues, such as mold or potential fire hazards.

3. Look Into Long-Term Care Insurance

Americans are living longer lives as evidenced by the increase in life expectancy. The Social Security Administration says that a woman who is 65 years old in 2020 can expect to live to about 86.8 years of age. But with longer lives comes the possibility of late-life health problems; these can be costly.

Long-term care insurance protects you, your home, and your spouse. Unlike Medicare – which usually will only pay for a short-term nursing home stay – long-term care insurance may cover the cost of extended care in a nursing facility or in your own home. The younger you are when you buy a policy, the less it will likely cost.

Long-term care insurance is not for everyone. However, it’s important to research long-term care insurance, as well as other options for paying for long-term care, as part of your retirement checklist.

2. Create an Emergency Fund

If you don’t have an emergency fund, now is the time to build one. This is separate from any other savings account that you have. An emergency fund steps in to cover the cost of unexpected expenses: a new tire, broken appliance, unexpected flight across the country, etc. It protects you from dipping into tax-sheltered retirement savings. It also keeps debt away from your credit cards.

It’s a good idea to have six months of income tucked away for safekeeping. However, the better your financial situation, the less you’ll need it. Three months might be plenty for a household with a good, steady income.

1. Check and Recheck Your Plans

You should update and assess your retirement plans every few months.

Inflation rates, investment returns, your health status, housing prices, and countless other factors can all play a big role in your financial security.

Ideally, you maintain your retirement plans somewhere that you can easily check in on them and make updates.  For example, the NewRetirement Retirement Calculator lets you create an account and save all of your data for easy updating anytime.  Best of all, when you make a change, you get instant feedback on what that change did to how much savings you need, your estate plan, and your cash flow.




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