Retirement Checklist: Do These 8 Things Before You Retire

It can be challenging to know the right time to retire. While some people aim for a certain age, others want to have a certain amount of money saved. But retirement is so much more than just an arbitrary number—it’s a major life transition that requires years of preparation.

Speaking of age, what is the retirement age? Great question! In terms of collecting Social Security, the full retirement age is 66 if you were born from 1943 to 1954. The full retirement age increases gradually for anyone born from 1955 to 1960, until it reaches 67. If you were born 1960 or later, full retirement benefits are payable at age 67. It's important to note you can take Social Security as early as age 62 but, if you choose to take it before your full retirement age, your benefits will be reduced.

If you’re getting close to your retirement date, review our retirement checklist to make sure you haven’t forgotten anything.

1. Take inventory of your assets

   First things first—you need to know where you stand financially. Make a list of every stock, savings balance, source of income and insurance policy. Then take account of your other assets: properties, vehicles, antiques, jewelry and any other valuable possessions. While you’re at it, add a column for your debts. Add up your assets and subtract your debts, then assess your current position. Try this retirement income calculator to help you figure out if you're saving enough.

2. Build an emergency fund

   Before you pull the trigger on retirement, make sure you have some money saved for a rainy day—or a new roof, car repairs, medical expenses or some other unexpected need. Keep your emergency fund in a separate savings account—that way you won’t be tempted to spend it on something else. Mountain America’s financial experts recommend that you save three to six months’ worth of income.

3. Lower your debt

   Take a look back at the debt column of your asset inventory. If it’s a fairly low number, you’re good to go. If it’s a little higher than what you’d like, you may need to work longer.

   That brings up the question of where your money should go first: saving for retirement or paying off debt. To decide, Mountain America suggests taking a look at the interest rate on the debt. If you have high-interest debt, see if you can refinance it to something more manageable. If that’s not possible, concentrate the bulk of your money to paying it down, while still contributing something (even a small amount) to your retirement account.

   If your debt has a fairly low interest rate, you’ll get more for your money by contributing to retirement—especially if you get matching funds from your company—while making lower debt payments. Make sure you’re paying at least the minimum payment each month.

4. Know what you want your retirement to look like

   Retirement is not one-size-fits-all. What you envision as a fulfilling retirement may not be the same for someone else. When deciding what your retirement looks like, think about where you want to live, how you want to spend your time and what type of expenses you’ll have. The lifestyle you choose will greatly determine how much money you’ll need.

5. Make an estate plan

   No matter what your total wealth may be, heading into retirement with an estate plan is a good idea. Have a solid plan to ensure that your assets will be distributed according to your wishes. The plan should include a will, a trust and a power of attorney. If you haven’t completed this one yet and you’re feeling overwhelmed just thinking about it, get some guidance by scheduling an appointment with a financial advisor.

6. Diversify your portfolio

   Diversification means you have different types of investments (stocks, bonds, real estate, etc.) in a variety of different industries. This, along with making reliable investments, can ensure that your portfolio doesn’t fluctuate too wildly and can provide a dependable income stream.

7. Know when to withdraw funds

   There are a lot of rules and regulations when it comes to when you can (and must!) take a draw from your retirement accounts. If you’re unsure or overwhelmed, try working with the institution that manages your funds. They can advise you so you don’t miss a deadline. Then, decide when you want to start collecting your social security benefits. Remember, the longer you wait, the more you’ll get.

8. Plan for some fun stuff, too

   Many retirees find themselves missing the structured schedule and socialization that work can provide. Be sure to develop a few hobbies and interests that will keep you busy and inspired during your retirement. Whether it’s family time, volunteering or learning how to sail, it’s important to have an idea for how you’ll spend your time.

Saving and preparing for retirement is a fantastic accomplishment. If you’ve crossed off every item on this checklist and hit your savings target, then say goodbye to your coworkers. Your retirement plan is in place and you’re ready to retire!