7 Step Retirement Planning Checklist

Irrespective of whether you are planning to retire in 10 years, five years, three years, one year, or have already retired, getting organized, planning ahead, and controlling your finances goes a long way toward making your retirement a little less stressful.

In addition, everyone’s retirement journey is completely different.

Additionally to the timing of when to begin receiving retirement benefits, other factors that can influence your benefits include whether you continue to work, what type of job you held, and if you have a pension from a previous job.

Everyone should learn the importance of saving money because we do not know how long our lives will last. A retirement budget should include unexpected expenses such as large medical bills or major home repairs. Are you going to have to help support someone in your family?

If you do not currently have a retirement checklist in place, the following seven points should guide you in the right direction.

Choose your retirement age

Full retirement age is the age when you can start receiving your full retirement benefit amount. The full retirement age is 66 if you were born from 1943 to 1954.

The full retirement age increases gradually if you were born from 1955 to 1960 until it reaches 67. For anyone born in 1960 or later, full retirement benefits are payable at age 67. You can get Social Security retirement benefits as early as age 62.

However, the U.S. government will reduce your benefit if you start receiving benefits before your full retirement age. When you delay benefits beyond your full retirement age, the amount of your retirement benefit will continue to increase up until age 70.

What will you do in your retirement?

While it’s nice to dream big, be realistic about your expected monthly expenses.

Are you going to travel, live like you are on an extended vacation, work part-time, or live in an assisted living facility? All of these things matter because you need to budget for your needs, wants, and wishes.

Where will you live?

Are you going to downsize your current home if the kids are out on their own? Are you going to relocate to a state that doesn’t have state income taxes?

Currently, nine states don’t have a state income tax: Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming.

Do you know what the cost of living is going to be compared to where you are? If not, check out a cost of living calculator by location.

Do you know your net worth?

How much cash, investments, home, furnishings, car, life insurance, etc.? How much debt have you accumulated?

Debt can be overwhelming, but if you separate the “good” debt (like a mortgage) from the “bad” debt (like credit cards) this may help alleviate some of the stress.

The bottom line is you need to pay off the bad debt first and have a positive net worth.

Without serious savings, you might have to work longer or part-time or consider changing your lifestyle to accommodate your finances.

Have you taken steps to focus on planning?

Do you have children, grandchildren, and siblings? Have you made your wishes known with a will, living will, trust, and medical directives?

Do you have an accountant or a financial professional to help with your taxes?

Have you considered three traditional retirement withdrawal strategies? These are the 4% rule, the strategic withdrawal plan, and the bucket strategy.

If not, you should meet with a financial professional to discuss the tax impact on your income sources ahead of time.

The more tax-diversified your sources of income, the further you’ll be able to keep and stretch your retirement funds.

Lastly, review your plan regularly

It isn’t a concrete plan set in stone. Being tactical and rebalancing your investments annually to be in alignment with your goals is important.

The market moves up and down based on economic and market volatility and it’s important to make sure your investment portfolios are still aligned to your current and long-term goals that you established.

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