10 Items That Should Be On Your Retirement Checklist

While exciting, the idea of a retirement planning process can leave you overwhelmed and with more questions than answers. Perhaps you’ve been saving money for retirement since landing your first big job, or maybe you didn’t even think about retirement until your 50's. Either way, enlisting the help of a professional financial planner can help you get on the right path towards your retirement goals. So, whether you’re close to retiring or have many years in the workforce ahead of you, it’s never too early to start retirement planning! Here are 10 items that should be on everyone’s retirement checklist:

Decide When You’ll Retire

Deciding to retire is a big decision. And while you might not have an exact date in mind yet, you should have a pretty good idea of when you’d like to join the retired population. For some people, retirement is determined by an age. For others, it’s a professional milestone or accomplishment. And yet another group of people are waiting for a financial milestone. Regardless of your preference, outlining what that looks like for you is a good first start in your retirement checklist.


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Review Your Assets and Income

Knowing how much you have—and can expect to have—by the time you reach retirement is an essential part of having a solid retirement plan. Now is the time to take inventory of your retirement accounts, savings and expected Social Security benefits or pension so you know what you’re working with when retirement day comes. Your financial advisor can help with this process, and even show you ways to simplify your portfolio as you get closer to retirement to make the picture even clearer. 

Create a Budget

Just like you have a budget for your everyday spending now, you should also create a budget for retirement. For most, the funds during retirement aren’t unlimited and expenses need to be accounted for. If when doing your budget, you can see that your projected expenses exceed your projected income/savings or distributions, then you’ll have to make some adjustments to make sure you can afford to retire in the manner you’d like to. The good news is that if you figure this out sooner than later, you can make adjustments before you head into retirement. With time on your side, the adjustments don't have to automatically be less spending in retirement; maybe it's save a little more along the way or decide to work a little longer as an example. 

Make a Plan to Manage Debt

Some types of debt may be good and some may certainly be bad. Consider the types of debts that you have now and whether that is a positive or negative as you plan for retirement. Work hard to pay off the types of debt that are bad like high interest credit card debt before entering retirement.  Consider whether you want any debt in retirement. While some debt like a low interest home mortgage might be an overall wealth building tool, some people simply don't want debt as they enter retirement. 

Plan Your Withdrawals

After you’ve spent years building up those retirement accounts, it’s time to think about how you’re going to draw them down in retirement. There can be age requirements and negative tax implications if not withdrawn properly. If you have both traditional and Roth type accounts, it's important to consider a strategy as to which accounts to use when.  Of course, at this stage of the game your calculations are going to be more general, but as you get closer toward the finish line the withdrawal plan will become more exact.

How Will You Spend Your Time in Retirement?

Don’t get so caught up in the financial aspects of retirement that you don’t plan for how you’re going to spend your time. For those who have spent decades in the workforce honing a skill or career, the sudden free time and lack of professional responsibility can be an adjustment. To avoid this, and possibly becoming lonely or depressed, you can make a list of how you plan to spend your time. Is there an organization you want to volunteer for? Or perhaps you’re interested in traveling. Whatever your passion, have a plan for pursuing it so you can make the most of your hard-earned retirement.

Retirement Housing

One key question as you plan for retirement is where do I want to live and does that include my current home or do I want to potentially "down size" or "right size" for retirement.  In some cases, it may also include buying a second or vacation home. The important thing here is to consider how your yearly expenses and any cash requirements (more down-payment money needed, more money available for the portfolio from a house sale) might change as a result of wanting to make changes to where and how you live.

Health Care

Planning for health care is a critical piece of the retirement puzzle. Planning for your long-term health care starts now. The very first thing you can do is be diligent about your health now. The better health you’re in entering retirement, the more good years you’ll be able to spend doing the things you love. It’s also important to plan for your health insurance and any long-term care needs you may have. This might mean separate investments or insurance policies, but your financial advisor can help your map out a plan. As part of this plan, you should consider having a living will or advanced directive. These legal documents tell your loved ones your desires for your health care in the event you are incapacitated. 

Create an Estate Plan

As part of your retirement checklist, an estate plan maps out your financial information and wishes for those assets in the event of your untimely passing. More than just a will, this plan ensures that the assets you plan to bequeath loved ones or charity organizations don’t get caught up in probate for months or even years. Some crucial elements of an estate plan include clearly indicating beneficiaries (and letting them know in advance) and keeping all of your account information updated and reviewed regularly.

Talk to an Advisor

Financial advisors are paramount to planning a successful retirement. At Financial Freedom, we make a great effort to see the whole picture. What makes you who you are? What are your major goals in life? What are your greatest fears when it comes to wealth management? Once we have an excellent sense of your personal and professional goals, we create a tailored plan to help meet your needs. Life is about more than money. Contact us today to start building your custom retirement plan.

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Filed Under: Comprehensive Financial Planning, retirement planning