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Retirement Planning Checklist: A Step-by-Step Guide

Depending on your birth year, the Department of Social Security sets your full age for retirement between 65 and 67. Your boss might have a different opinion. 

One of the most difficult decisions you will have to make is when to retire. If you retire too late, you might not have the stamina to enjoy yourself. 

However, retiring too soon may put you in financial insecurity. You can create a financial goals for your retirement with the assistance of a financial counselor. This eight-item checklist will assist you in assessing your level of retirement planning.

1. Make a List of Your Resources

Prior to creating a strategy or monitoring your progress, you must ascertain your financial situation. Examine your present spending plan and list all of your obligations, liabilities, savings amount, sources of income, and insurance coverage. 

Remember to account for real estate, cars, and other priceless assets that have an impact on your income. Making a schedule that you can edit frequently is an excellent method to accomplish this. 

You’ll be able to evaluate your existing financial status and make plans appropriately thanks to this approach.

2. Build an Emergency Savings

Make sure you are covered in case something goes wrong before making any significant financial decisions. Ideally, when you’re a few years away from retirement, you’re not discovering the importance of emergency savings for the first time.

However, if you have managed to avoid having an insurance blanket up to this point, it is now time to do so.

It can compensate for delays in the beginning date of your Social Security or pension benefits, and it will protect you in the case of a personal disaster.

While some experts advise saving enough to cover at least a year’s worth of expenses, others advice setting aside three months’ worth of living expenses. 

You should have enough money saved up for six months to cover you in an emergency. This six-month fund’s amount should be determined by your expenses rather than your income. 

This savings account is about your spending, regardless of your job status at the moment. It is important to factor in costs that are now paid for by your job, such as medical bills, as an emergency savings account will need to follow you into retirement.

To avoid being tempted to squander it, keep your fund safe and apart from your other savings. A money market or passbook savings account can be an intelligent decision. 

They still earn interest while being liquid in the event you need to retrieve your money. You should educate yourself on the finest places to invest your emergency cash before making a choice.

3. Clear Out Every Debt

In a perfect world, none of us would have any debt when we retired. Your income will probably decline, so any fixed costs will start to account for a bigger portion of your spending. 

If you’re getting close to retirement, you should review your inventory’s debt column. Put terms and interest rates in an additional row next to your outstanding obligations.

So, how must one approach their debts? Either paying off debts with the lowest balance or liabilities with the greatest rate of interest are the two common ideas about where to begin. 

We advise beginning with the debts with the highest interest rates, if you can bear it. Usually, credit card debt is the first, then personal and auto loans. And we don’t only mean meeting the bare minimum each month.

You’ll need to devote as much income as you can to paying off your top debt while still making the required minimum repayments on other debts if you want to see any progress. Because they often have low interest rates, mortgages are a smart debt to keep for last.

Whichever repayment plan you decide on, the most crucial thing is to follow through. Put it in a calendar, monitor your development, and enlist the help of a friend or relative to hold you responsible. 

To keep yourself motivated, treat yourself to a modest incentive each time you pay off a debt.

4. Assess Your Needs for Retirement

You must choose your retirement plan before you can actually retire. Think about your preferences for living location, level of costs, and employment status (it may seem strange, but some individuals choose to work in retirement). 

When it comes to how long you want to retire, try to be practical. Although it can be challenging to project, you can always adjust your estimate later.

You ought to make a timeline that illustrates the start and end dates of each revenue stream. This will assist you in managing your cash flow and estimating your retirement savings requirements. 

Examine your Social Security benefits, individual retirement plans, employer-sponsored plans, and, in certain cases, your pay and pension. Make sure you’re considering each income in after-tax dollars because a lot of retirees forget to account for taxes.

Compare your pre-retirement and post-retirement spending. You can be more prepared the more honest you are. You can locate a financial expert to assist you if you need assistance creating or reviewing your plan.

Read More About: 10 Retirement Planning Ideas to Consider About

5. Square Off Your Medical Insurance

One of the largest costs you’ll have in retirement is healthcare. The Consumer Expenditure Survey from the Bureau of Labour Statistics indicates that in 2020, healthcare costs for individuals between the ages of 55 and 64 came to $5,820 ($6,749 for those over 65). Please do not feel bad if this requires you to quickly modify Step 4.

You should take into account where you will obtain health insurance coverage in addition to budgeting for these costs. You can mostly count on Medicare to meet your retirement needs if you resign before or after hitting the age of 65

The official Medicare website,, provides an overview of coverage and expenses. If there is anything you require that isn’t covered, give it further thought. Some people prefer to carry an additional insurance policy.

Planning to retire early makes things more difficult and costly. You will need to obtain insurance for health on your own if you do not now qualify for Medicare and do not have coverage from your spouse’s job or from your previous employer. 

Just be sure your insurance doesn’t expire when you need it most, regardless of your circumstances. Understand your coverage’s terms and conditions as well as the total amount of payments, deductibles, co-pays, and out-of-pocket expenses that you should budget for.

6. Plan Your Estate

Although nobody likes thinking about their death, as retirement draws near, so does the final phase of your life. 

Having an Invest in real estate plan in place can guarantee that your wealth is distributed in accordance with your wishes and that your loved ones are not left with excessive debt after your passing.

You must designate a power of authority and healthcare agent to make choices on your behalf in the event of your weakness, in addition to drafting a will.

In addition, you’ll need to choose beneficiaries for shared assets, retirement accounts, life insurance policies, and guardians for dependents who are still alive. You don’t want the IRS to inherit your estate, so take taxes into account as well.

Any unaccounted-for information, such as preferred funeral plans or the distribution of sentimentally significant family objects, might also be included in a letter.

Make sure that every document is properly notarized and kept in a secure location. To keep things organized and accessible, make a list of all of your personal information, including your date of birth, Social Security number, bank account number, insurance policy number, and digital passwords. 

Once your strategy has been developed, don’t forget to examine it whenever something significant happens in your life, or a minimum of every five years.

7. Examine Your Requirements for Retirement Investing

Having more money is always a good thing. Creating an investing portfolio based on one’s intended retirement date is among the greatest blunders made by American employees. 

Their post-retirement earning potential is so limited. Many people who want to extend the duration of their overall savings may find it helpful to look into how saving for retirement could boost the returns in their retirement accounts.

Remember that when you get older and don’t have a steady job, your tolerance for risk may shift. 

Although it’s not your only choice, you might wish to use an overall return portfolio that permits you to take out a specific percentage while aiming for an extended rate of return.

Annuities, funds with closed ends, bonds issued by governments, real estate, dividend-paying funds, and income-producing mutual funds are all excellent choices for retirees. Your ability to select the best solution for yourself will improve with increased knowledge.

8. Find Out How to Withdraw Money and Reduce Taxes

It may seem absurd that it’s now time to withdraw money from your retirement accounts since, ideally, you’ve invested in them for your whole adult life. Naturally, you’ll need to know how to accomplish this first.

Determine if you want to keep money in your employer-sponsored plan or transfer it to an IRA account. If you are over 59.5, consolidating is generally a better option. 

You can withdraw funds from your retirement accounts at this time without being penalized for taking an early withdrawal. The law mandates that you take required maintenance distributions (RMDs) by 70.5

Your choice should be based on what feels most comfortable for yourself and your family as well as what is tax-efficient. To learn more about how withdrawals operate, get in touch with the organization that looks after your money.

The next decision you’ll need to make is when to apply for Social Security. The majority of experts advise delaying enrollment until you reach full retirement age in order to maximize benefits; however, you may enroll at any time between your ages of 62 and 70

Your bill will be larger the longer you wait. You have three options for applying for Social Security: online, over the phone, or in person at your neighborhood office.


You are finally able to enjoy a few of the assets you’ve been saving for for a while during retirement, which can be a lovely moment. You have more time for your interests, family time, and vacation. 

These options are only accessible, though, if you are ready financially for retirement. It’s critical to plan ahead and to regularly review your retirement plan and make any necessary adjustments.

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