Some people set a particular age when they want to retire. It might be more helpful to look at your financial schedule to establish a retirement date. Just because you want to retire on a certain birthday doesn’t mean you’ll be quite financially ready to do so. After all, there’s more to retirement planning than just paying off your mortgage.
Consider the following list of 16 things to do before the big day.
- Pay off all major debt obligations, including auto loans, credit card balances and the mortgage for your primary home and any vacation properties.
- Consider life insurance needs — do you need a death benefit for your spouse, or do you have enough for both of you in retirement income sources? Do you want to ensure a legacy for your children or grandchildren?
- Consider long-term care insurance — discuss your current situation and needs with a financial professional to help determine the long-term care insurance options that may be appropriate for you.
- Consider an additional source of steady and reliable income, which may mean repositioning a portion of your investment portfolio to protect those assets from market risk and create a lifelong income stream through the use of insurance products, such as annuities.
- Conduct a house check — see what major repairs may be needed at some point during retirement, such as a new roof, water heater or HVAC system. Have appliances checked out for an estimate of how long they may last.
- Do any remodeling that’s been on your mind for a while; consider keeping a spare bedroom for future live-in help.
- Get your house outfitted to accommodate your needs in the future. It may seem unnecessary now, but it’s best to make these upgrades before you’re on a fixed income. Consider adding handrails to the porch stoop, grab handles in the bathroom, rearrange kitchen cabinets so the things you use the most are the easiest to reach, replace doorknobs and faucets with lever handles that are easier to open; if your house has several stories, consider moving your bedroom to the ground floor.
- Assess how long your cars should last; consider trading in/purchasing a new one if it looks like you might be saddled with repairs on an older car.
- Put together an emergency fund to help cover costs likely to be incurred later on, from replacing the roof to buying a new car. Even pad it for financial support you may need to provide your children or grandchildren in the future.
- Work with a financial advisor to conduct a full assessment of current and future expenses to see what can be eliminated (work clothes and dry cleaning), new expenses (taking up golf) and expenses that will “trade out” as you age (travel budget for more health care spending).
- After you figure out how much your expenses could potentially change over the years, develop a budget for each phase of retirement.
- Work with a financial advisor to help coordinate Social Security benefits with your personal savings and investments withdrawal strategy. It’s important to know that financial advisors are able to provide you with information but not guidance or advice related to Social Security benefits.
- Consider downsizing now or in the future, based on lifestyle plans. For example, if you plan to travel extensively, it may be easier to maintain a condo rather than a large house. If you plan to settle in, garden and spend time at home, keeping the family house may make more sense. However, create a contingency plan for later years in case one or both spouses need assisted or full-time care.
- Even if you don’t downsize, consider making an inventory of your possessions and getting rid of clutter you don’t need and passing on unused furniture and housewares to your children.
- Work with an attorney to establish an estate transfer plan and communicate it to all family members. Review it every few years to ensure it’s still relevant and reflects your wishes.
- Complete paperwork for medical directives and powers of attorney.
This is quite a laundry list, and it’s likely that once you get started, you’ll think of other things you should do. But consider the reassurance you’ll enjoy if you get most of these things done before you retire.
Guarantees and protections provided by insurance products including annuities are backed by the financial strength and claims-paying ability of the issuing insurance carrier.
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