The countdown is on! With only 12 months left until your retirement, it's time to shift preparations into high gear and optimize your finances and lifestyle.
Don't leave things to chance. Instead, work your way through our checklist so you can enjoy the retirement you've always dreamed of.
Start your final lap around the corporate racetrack by assessing your financial health. Determine your net worth using your assets and liabilities. Examine your savings including retirement accounts, investments, and emergency funds. Make a note of any outstanding debts.
Next, estimate your retirement expenses. Add up essentials like housing, healthcare, and groceries but also include discretionary spending and potential long-term care expenses.
Schedule a meeting with your financial professional to discuss your retirement goals. They can help you explore retirement strategies including opportunities to contribute more to your retirement accounts. If you’re eligible, consider catch-up contributions to reduce your overall tax liability and maximize compound interest.
As you approach retirement, you’ll want to organize your employer-provided and government benefits. These may include:
Coverage will typically end upon retirement if you’ve had employer-sponsored health insurance throughout your career. Begin exploring private health insurance plans or consider enrolling in Medicare if you qualify.
As we age, dental health becomes increasingly important. Unfortunately, many employees lose dental coverage after retirement, and basic Medicare is very limited for dental procedures. Start researching other dental coverage options for retirement including:
Medicare Advantage plans
Individual coverage
Spousal coverage
If you can’t find affordable coverage, start a savings account for out-of-pocket dental expenses now and schedule any necessary dental procedures during your last year of employer-sponsored coverage.
Take time now to explore other employer benefits that may have accrued during your employment including:
Life insurance
Disability insurance
Retirement plans
Review the terms and conditions of your benefits to understand how they may change in retirement. Take action now to optimize each benefit as part of your retirement planning.
Social Security and pension benefits are crucial sources of retirement income for many individuals. But they require careful strategies and consideration.
Take time to examine your Social Security benefits, keeping in mind that factors such as when you claim benefits and whether your spouse receives benefits can significantly impact your total income.
If you’re fortunate enough to have an employer-sponsored pension, start learning about lump-sum distributions, annuities, and other crucial factors now.
With only months left before retirement, now’s the time to prioritize reducing or eliminating debt. Outline strategies for paying down high-interest debts. Tackling debt offers peace of mind during retirement, improved cash flow, and fewer expenses.
Now is also the time to review and update your estate planning documents. Accurate, updated wills and living trusts can safeguard your assets and ensure a smooth transfer to heirs when the time comes.
Addressing and managing existing health issues can help ensure a healthy and enjoyable retirement. Schedule a thorough health checkup to assess your current health status. Discuss your unique health needs with your doctor, which could include:
Comprehensive physical exam
Medical history review
Blood tests
Vaccination status
Bone health
Vision and hearing check
Mental health evaluation
Medication review
Cancer screenings
Do you have a clean bill of health, or are there some concerns to address? Consider this when deciding where to live in retirement. Evaluate the pros and cons of each option, which may include:
Staying in your current home
Downsizing
Relocating closer to family
Exploring retirement communities
Reflect on the type of lifestyle you envision for your retirement years. Where do you want to live? What’s your desired level of activity? Do you want to travel, learn a new hobby, or spend more time with family?
Goals, both short term and long term, often require a budget to achieve. By considering your ideal lifestyle now, you can start preparing to make the most of your retirement freedom.
It’s generally best to inform your employer of your retirement plans as soon as possible. A two-week notice may be sufficient for resigning from your job but not for retirement. Having open and transparent communication with your employer, teams, and coworkers is vital. Discuss your strategies, retirement date, and any necessary steps for a smooth transition.
Review your employment contract regarding any specific retirement requirements. If you have specialized skills or responsibilities, discuss a reasonable transition period with your employer that allows for adequate knowledge transfer without delaying your retirement date.
As the big day approaches, complete any pending projects and tasks to minimize disruptions.
Checking off the key items on your retirement preparation to-do list is also important. This will pave the way for the rewarding next chapter you've been looking forward to.
Take stock of your finances and have conversations with financial professionals to ensure your savings are on track to maintain your lifestyle. Make a spending strategy and remember to look into healthcare, insurance, and estate planning specifics.
If it all feels overwhelming, remember you don't have to go it alone. At New York Life, our financial professionals are here for you.
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This article is provided for general informational purposes only. Neither New York Life Insurance Company, nor its agents, provides tax, legal, or accounting advice. Please consult your own tax, legal, or accounting professional before making any decisions.
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