Keep this ten-year retirement planning checklist on hand as you navigate saving, investing and other retirement decisions.
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Are you ready to retire? Have you even started a retirement planning checklist? By 2030, one out of five Americans will be retirement age. This generation will all be over 65, and the leaders of Generation X will be right behind them. If you’re in your late fifties right now, you’re almost done with the rat race.
David John, senior strategic policy adviser at AARP’s Public Policy Institute in Washington, D.C., says, “This is the chance to fix any mistakes from the past and make the plans you need for a safe retirement.” C. “Even if you’ve done nothing, there’s still time to put yourself on a sounder footing. ”.
Think youre behind the eight ball? Theres no need to panic. You may even find that you have saved more than the average for your age in your 401(k) account or IRA account.
Are you counting down the years until you retire? If so, these last three years are very important for making sure you have a smooth transition from working to your golden years. I’ve helped many clients get through this difficult time, and I’m going to tell you everything you need to know to be fully prepared.
Let’s face it – retirement planning can feel overwhelming. But breaking it down into steps that are easier to handle makes it much more doable. These last three years are your chance to get your finances in order, test your budget for retirement, and get ready emotionally for this big change in your life.
First Things First: Assess Your Financial Situation
1. Review Your Retirement Savings
The first thing you should do is take a comprehensive look at where you stand financially:
- Evaluate all retirement accounts (401(k)s, IRAs, brokerage accounts)
- Determine if your savings are on track to meet your retirement income goals
- Consider increasing your contributions if necessary
According to financial experts at Charles Schwab, “Many retirees say transitioning from saving to living off their savings is one of their most stressful challenges.” This is why reviewing your retirement plan at least once a year is crucial.
2. Create a Realistic Retirement Budget
Now’s the time to figure out exactly what your expenses will be:
- Track your current spending patterns
- Identify which expenses might decrease in retirement (commuting, work clothes)
- Anticipate which expenses might increase (healthcare, travel, hobbies)
One of the most useful tips I’ve come across is to live on the budget you plan to use in retirement while you’re still working. As the experts at TheMoneyKnowHow say, “Try to live off your estimated budget three years before you retire.” Because the first year never happens, make changes and try again the second year. The third year should be spent fine-tuning your lifestyle budget. “.
This test run will show you if your expectations match reality!
3. Build a Cash Reserve
Financial advisors recommend having enough cash on hand to cover at least 1-2 years of living expenses. This safety net gives you flexibility and peace of mind, especially during market downturns when you might not want to sell investments.
To quote FinanceBuzz, “You will thank yourself later for setting aside a good amount of cash to handle any emergencies or market downturns.” “.
Smart Money Moves in Your Final Working Years
4. Maximize Your HSA Contributions
Health Savings Accounts offer incredible tax advantages – contributions are tax-deductible, earnings grow tax-free, and withdrawals for qualified medical expenses are tax-free. If you have access to an HSA, max it out during these final working years.
FinanceBuzz emphasizes: “An HSA is a big part of any sound retirement strategy, and for good reason. The tax advantages are immense.”
5. Eliminate High-Interest Debt
Getting rid of credit card debt and other high-interest loans should be a top priority. These debts can quickly eat away at your fixed retirement income and cause unnecessary stress.
As one expert notes, “Reducing the interest payments will save you a lot of stress later in retirement, as debts will eat away at your fixed monthly income.”
6. Consider Paying Off Your Mortgage
While mortgage interest rates are typically lower than credit card rates, there’s significant peace of mind that comes with entering retirement mortgage-free:
- No monthly mortgage payment means lower fixed expenses
- If full payoff isn’t possible, consider refinancing or paying down principal
- Evaluate if the emotional benefit outweighs potential investment returns
7. Review and Adjust Your Investment Strategy
As retirement approaches, it’s time to reassess your risk tolerance:
- Consider gradually shifting to a more conservative allocation
- Focus on preserving capital while still allowing for some growth
- Don’t swing too conservative too quickly – you still need growth to fund a potentially long retirement
Schwab advises: “It’s a good idea to check your investment portfolio at least once a year to be sure it aligns with your plan and still makes sense for you.”
Strategic Planning for Social Security and Healthcare
8. Determine When to Take Social Security
This is one of the most significant financial decisions you’ll make. Delaying benefits until your full retirement age (or even age 70) can significantly increase your monthly benefit amount.
As noted by Schwab: “While there is no correct age for everyone to take it, we generally suggest waiting until you are ‘full retirement age’ (or as old as 70) if you’re in good health and can afford to wait, since deferring can pay off over time and provide higher income over a long retirement.”
The potential increase can be substantial – waiting until age 70 can increase your monthly payment by up to 76% compared to claiming at age 62!
9. Plan for Healthcare Costs
Medicare kicks in at age 65, but it doesn’t cover everything:
- Research Medicare options (Parts A, B, D, and supplemental plans)
- Budget for premiums, deductibles, and out-of-pocket costs
- Consider long-term care insurance or alternatives
Schwab suggests: “When Medicare kicks in at age 65, it’s reasonable to plan on spending about $200−$850 a month. But where you live, the coverage you choose, inflation, and other personal factors play a role.”
Don’t Forget About Estate Planning and Legal Matters
10. Update Essential Estate Planning Documents
Now is the time to make sure your affairs are in order:
- Create or update your will
- Establish powers of attorney for finances and healthcare decisions
- Review beneficiary designations on all accounts
- Consider whether a trust is appropriate for your situation
11. Consider Long-Term Care Planning
About 60% of people will need some form of long-term care, and the costs can be substantial. Options include:
- Family support (though this can be stressful for loved ones)
- Personal savings
- Long-term care insurance
- Hybrid life insurance/long-term care policies
Practical Steps for Your Home and Lifestyle
12. Update Essential Home Appliances
Replacing older appliances before retirement can save you from unexpected expenses later. As FinanceBuzz suggests, “The last thing you want to deal with when you’re retired is a broken refrigerator or malfunctioning oven.”
13. Consider If You Want to Downsize
Evaluating your living situation is crucial:
- Do you need as much space as you currently have?
- Would moving to a smaller home free up equity for retirement?
- Is your current location where you want to spend retirement?
As one expert points out, “If you’re an empty nester, you probably don’t need a big house that needs constant attention. Selling your primary residence and moving to a smaller place will also give you more cash on hand for other things.”
The Emotional Side of Retirement Planning
14. Prepare for the Emotional Transition
Retirement isn’t just a financial change – it’s a major life transition:
- Think about how you’ll spend your time
- Consider part-time work or volunteering opportunities
- Explore new hobbies and interests
- Plan ways to stay socially connected
15. Consult with Financial Professionals
Getting expert advice is especially valuable in these final years:
- Work with a financial advisor to review your overall plan
- Consult with a tax professional to develop tax-efficient withdrawal strategies
- Consider meeting with an estate planning attorney
As FinanceBuzz notes, “Having another pair of eyes look over things will help immensely and take a lot of stress off of your shoulders.”
Final Thoughts
The 3-year countdown to retirement is your opportunity to fine-tune your financial plan, test your retirement budget, and prepare emotionally for this major life transition. By addressing these 15 essential areas, you’ll be well on your way to a secure and fulfilling retirement.
Remember, retirement planning isn’t a one-size-fits-all process. Your specific situation, goals, and values should guide your decisions. But following these general principles will help ensure you’ve covered the major bases.
I’ve seen clients who took these steps enter retirement with confidence and peace of mind, while others who neglected planning struggled with anxiety and financial stress. Which group do you want to be in?
What steps have you already taken to prepare for retirement? Are there specific areas where you feel most uncertain? I’d love to hear your thoughts and questions in the comments below!
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Retirement planning checklist: Just get started
No pressure, of course. But navigating this stretch is easier said than done as you juggle work, saving, investing and helping the kids leave the nest. If you don’t know where to start, here is a 10-year, year-by-year list of things you should do with different parts of your financial plan as you get closer to retirement.
This checklist assumes you plan to retire in your 60s or 70s. If you plan to retire early, say in your 40s or 50s, you may need a more aggressive plan.
Get ready for the countdown!
8 Things I WISH I KNEW Before I Retired (**3 Years After**)
FAQ
What is the first thing to do before retiring?
The very first thing to do when you retire is to relax and savor your achievement with loved ones before diving into new plans.
What are the 3 R’s of retirement?
Rediscover, Relearn, Relive—embrace the journey. If you are still looking for an active lifestyle with a community at the heart of it, a retirement community may be the best option for you. Historically they were a place to move when an elderly homeowner was no longer able to live in their own home.
What is the $1000 a month rule for retirement?
The “$1,000 a month rule for retirement” is a simple way to figure out how much you need to save to have a steady monthly income in retirement. Usually, you’ll need to save $240,000 for every $1,000 you want to make each month. Based on a 5% annual withdrawal and 5% annual return, this rule says that taking out $1,000 a month from a $240,000 portfolio would give you that much income without using up your savings.
What is the biggest mistake most people make regarding retirement?
The top ten financial mistakes most people make after retirement are:1) Not Changing Lifestyle After Retirement. 2) Failing to Move to More Conservative Investments. 3) Applying for Social Security Too Early. 4) Spending Too Much Money Too Soon. 5) Failure To Be Aware Of Frauds and Scams. 6) Cashing Out Pension Too Soon.
Can you retire comfortably with 5 years left before retirement?
Here is a simplified year by year to-do list for those looking to retire comfortably. With five years left before retirement, there is still time to improve your retirement security. There are five years left until retirement. The first step is often the hardest and most painful for people who aren’t ready for retirement as they had hoped.
How many years until retirement?
Five Years Until Retirement Step one is often the most challenging and painful for those who are not as prepared for retirement as they had hoped. You need to get a handle on where you stand today, financially, and what that means for your financial well being in retirement.
When should I start getting serious about retirement?
For most folks, I’d encourage you to start getting serious about retirement when you’re ~5 years away.
How long after retirement should you plan for tax savings?
Two Years to Go Until Retirement Retirement will bring some amazing tax planning opportunities your way. You will need to lay the groundwork for these tax-saving moves before you actually quit working forever. Many people may see their taxable income drop substantially in the year following retirement.
How long does it take to save for retirement?
It may take decades over the course of a career to save for retirement, but there is a small and defined window of time leading up to one’s golden years that is exceptionally critical when it comes to planning.
How do I maintain a checklist 18 months before retirement?
Maintain A Checklist 18 months before retirement, I started a checklist with everything I had to address before retirement. You can start with the 20 items from this post, then add to it as specific tasks come to mind. It was a lifesaver for me and became the roadmap that led my tasks as I made my final preparations for retirement.