Will you have enough money saved? Will you need part-time work? Are you prepared for the possible curveballs retirement can pitch you? These are just some of the questions this retirement planning checklist hopes to tackle. Whether you’re nearing retirement or looking far ahead, this checklist can lay the foundation for a successful and fulfilling retirement.
1. Budget for Retirement
Base your estimate on concrete data. The best way to come up with a realistic budget is to use your current monthly expenses as a guide. Remember to Look at anticipated expenses and adjust for inflation (a good ballpark is 3-5% per year). Although these figures can change, they’re a good starting point.
[Related: Retirement: How Much Money Do I Really Need?]
2. Planning Your Retirement
Decide what age you’d like to retire. Then use your previously devised budget to figure out your savings goal. While factors may change, this gives you a solid starting point, and makes clear your goals. Keep in mind that you may desire to live at a higher standard of living when you retire.
3. Figure Out Your Retirement Income
Make a timeline for your anticipated income streams. When will you claim your Social Security benefits? It’s worth it to determine what Social Security options are the best for your situation. Consider contacting your local office to learn more.
Also figure out when your employer-sponsored accounts will pay out. Remember that a decline in markets can affect your pension significantly, so you should plan accordingly.
4. Monitor Retirement Accounts At Least Annually
Make sure you’re keeping tabs on your retirement accounts regularly. It’s best to check to make sure that you’re saving enough, and when possible, overestimate. Sometimes it can be tricky to see the whole picture because your investments may be spread across several firms. Doing the extra work to have a full picture is worth it.
5. Keep in Mind: It’s Never Too Late to Begin Saving for Retirement
The earlier you begin, the less aggressive you may need to be. However, it’s a good idea to get serious as soon as possible. You will not want to sacrifice your living standards in retirement: better to be aggressive now so you can be set up later.
6. Be Debt Free
One of the major goals to accomplish before retirement is to become debt free. The fewer significant debts you have when you retire, the better. Get out of debt by paying off the highest interest debts first. Be aggressive because debts will erode your monthly retirement income fast.
7. Stay the Course
Don’t lose sight of your focus on retirement planning. Make sure you’re maxing out your contributions every year. Also, remember that you may be able to take advantage of “catch up” payments after a certain age (usually after 50). You will be patting yourself on the back when you enter retirement debt free and with ample savings. This is the purpose of a retirement planning checklist.
8. Remain Vigilant
After retirement, you will still want to keep the pulse on your investments. Your investment strategy needs to take into account your new situation. You’ll still want to make your money work for you, so consider hiring a financial advisor to make the best of your unique needs.
9. Remember Health Care
Your health care is most likely covered by your employer now, but that will change after retirement. You will need to make sure that your budget takes into account purchasing health insurance if you retire before you can get Medicare benefits. Even if you are eligible for Medicare, you will want to know what plan is best for you and if you need supplemental insurance.
Take care to note co-pays for doctor visits, specialty care, and prescription drug costs if that applies to you. Keep in mind that your health situation can change as you age.
10. Learn the Regulations Governing Your Retirement Accounts
Know the required age for withdrawal for all your retirement accounts. You’ll also want to know the rules for rolling your 401(k) into an IRA or a Roth IRA. Withdrawing before a certain age can incur a costly penalty, and you will want to avoid that.
On the other end, you will want to know at what age you will be required to withdraw a minimum amount (RMD). Failing to be aware of this can cost a significant portion of your savings in tax penalties.
Retirement Planning Checklist Takeaways
You will want to start planning as early as possible for your retirement. Once you begin planning, you will need to stay on top of all your investments and make adjustments as your life changes. If you would like professional advice regarding your ideal retirement, contact the experts at Blisk Financial Group today to get started.