Getting Ready to Retire: A Retirement Checklist
Congratulations, you’ve worked hard and retirement is finally on the horizon. As exciting as the prospect is, planning for retirement can be daunting too. There are so many considerations and one mistake can be detrimental to the very future you have so carefully planned for. Here’s a retirement checklist to get you on the right path. We’ll take a look at the steps to retirement in two parts: the decision to retire and preparing to retire.
Are you really ready to retire?
1. What does retirement look like for you?
- Where will you live?
- What will you do?
- Will you continue to work on a part-time basis?
2. Could you (or should you) delay retirement?
- Often, by delaying retirement for even a short time, you can increase your retirement income and savings rather significantly.
3. Can you afford to retire? Can you create an income stream that is greater or equal to your expenses?
- Determine your expenses in retirement
- Determine your income in retirement (Social Security, pensions, part-time income)
- Consider other sources of retirement funding (401k, IRAs, etc)
Getting Ready to Retire:
1. Establish an emergency fund of one year’s worth of retirement living expenses.
2. Pay off your mortgage if it is possible without drawing from qualified retirement accounts.
3. Create a Retirement Budget
- Consider all potential expenses, both monthly, annually, and rare expenses (such as a new roof on your home or a new car, or home health care services)
- Review income sources
- Complete a Social Security analysis to determine the best strategy for collecting
- Consider inflation implications
- Develop a withdrawal strategy for your investments (taking taxation into consideration). We recommend 4% of your investable assets.
- Complete a cash flow analysis so you can see how your income and expenses are affected over time. This will almost certainly need to be completed by a financial professional.
4. Review your healthcare options
- Enroll for Medicare, if applicable
- Consider a supplemental policy to cover expenses Medicare doesn’t.
Obviously, the decision to retire is not one to be taken lightly. There is a lot to consider and many steps to take to be prepared for a successful retirement. Consider working with an experienced Certified Financial Planner and Fiduciary to develop and even implement a retirement plan. This will ensure that you achieve the retirement you have always dreamed of.