Retirement Checklist

Retirement Checklist

I often get this question from clients that are nearing retirement, “what should we be doing to prepare for retirement?”  It is a great question, and I figured I would collect the top items I generally run through when answering this question.

So, what are the top things you should be thinking about when it comes to getting retirement ready?

1. Get Mentally Ready– I’ve stated this before, but I am a fan of retiring to something, not from something.  Is it your job you hate?  Or do you have a higher calling for those post-working years?  Really give some real thought to what is next for you in your life.  It is not usually a good idea to retire and be bored out of your skull, as they say, an idle mind is the devil’s workshop.
2. Check Your Expenses– This is super important, as I don’t know how to plan for someone who has no idea what their lifestyle costs to maintain.  There is no magic number needed saved, rather the amount one needs socked away is directly correlated to the amount they intend to spend in retirement.  Without those figures, we are simply throwing darts in the dark.
3. Get The Large Expenses Done Now– Now it is impossible to accurately predict every last large expense in retirement.  That said, I am a huge fan of knocking out those known large expenses prior to retirement and using working capital to fund them.  Thus, if you know that you need a new roof, or your windows need to be replaced, trust me when I tell you it will feel a lot better doing them prior to never collecting a paycheck forever.
4. Health Insurance– Depending on your age (prior to 65 or 65 or older), you should absolutely get a sense for what your health insurance expenditures are going to look like.  We have great connections in this realm, but people are often very much surprised as to what a non-employer-sponsored health insurance will actually cost them. 
5. Social Security Strategy– We don’t need to have every last thing figured out in retirement.  That said, having a plan of attack for how and when you will collect your (and spouse’s) Social Security is one I wouldn’t glance over.  This takes a lot of thought, planning, and consideration.  Don’t leave it to chance, as it is a sizeable part of almost everyone’s retirement picture.
6. Housing Assumptions– I’ve written about “retirement dating” quite a bit.  Where are you going to live in retirement?  One home or two? Rent or buy?  Snowbird or not?  Closer to kids/grandkids or further?  Travel 6 months a year?  Downsize, upsize, or right size?  The list goes on when it comes to your ideal retirement lodging.  Point being, start thinking about it now from both an ideal situation and a test drive situation.  Generally, you don’t know until you know what is ideal for you and your beloved.
7. Run a Financial Model– Oh right, if you are reading this, you likely work with one of the fantastic financial planners at Diversified.  Reminder, we LITERALLY (in the literal sense) run financial models for a living.  These models can do all sorts of what-if scenario planning and help conflate all the myriad variables into one clean output. 
8. Drawdown Strategy– Do you have a well-thought-out tax strategy for who, what, where, why, and when you are taking funds?  What about if the markets are up?  What about if they are down?  Having a well-crafted and thought-out drawdown strategy is integral to being prepared for retirement.  This is certainly not a thing you can just “wing it” on, and rather need an investment strategy for all these logistics.  Yes, our spend and replenish strategy slays (as my kids would say) in retirement, but regardless, any strategy is better than the lack of one.
9. Tax Strategy– You plan to gift funds in retirement?  What about charity?  When should you touch your IRA or your Roth vs your non-retirement accounts?  Have you thought through capital gains rates and Medicare IRMA?  Needless to say, you should certainly make sure you have at least a high-level tax strategy for retirement.
10. Debt Planning– Do you still have a mortgage or other constructive debts?  This isn’t necessarily a bad thing, but it is a thing that goes into your retirement strategy.  It is important to know what you have exposed in debts and what your plan with those debts in are short and long term.  This can help you level set once and for all. 
11. Investments– You know what we also do at Diversified????  Ok, you get it, I’ll stop.  It is important to understand how you plan to adjust your investments for your retirement needs and comfort level.  I feel very strongly that there is not one “retirement allocation” that is right for everyone.  Rather, this should be extremely bespoke and aligned with your needs.  All you’ve known your whole life is how to invest for maximum growth within your risk comfort level.  Now it is time to flip it on its head and start thinking about that drawdown stage.
12. Estate Planning– Don’t jump to conclusions that I’m saying you should get your estate planning in order because now that you are retired, you are ready to, well, die.  Rather, it is important that all your ducks are in a row.  From power of attorney to where your assets should go, and the plethora of other items addressed in these crucial documents. 
13. Review Insurance Needs– I mentioned health insurance above, so I’ll simply focus on everything else with the lucky number 13.  Do you still need or want life insurance?  How about long-term care insurance?  That umbrella policy still warranted?  Are you exposed on your homeowners or auto insurance?  These are all great things to review prior to pulling the proverbial plug.   
14. Get Excited and Discuss with Your Family– The final step is that this is proven to be one of the best times in most of our lives, retirement that is.  You should be open and honest, not just with yourself, but with your entire family about what this means.  Having these transparent conversations can be eye-opening and make sure your family unit is all on the same page.

Back to work

There it is, 14 of my top retirement-ready prep thoughts to help you get your mind and your finances in order.  Some of us can only talk about retirement right now, throat clear, so I am going to get back to work.  That said hope this was helpful, and know we are here for you and all your retirement and financial needs.

As always, stay wealthy, healthy, and happy.