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Your One-Year-From-Retirement Checklist

Jul 15, 2019 3 min read


So you're one year away from your planned retirement date — close to getting that ultimate reward for all your years of hard work. But do you feel fully ready to take this next major step in life?

If you're unsure, help is on the way. Here's a detailed checklist you can go over to rate your own retirement readiness.

How many of the items below have you completed? Have you…

 

  • Set your sights on Social Security? If you're over age 62, and you began taking benefits when you first became eligible, you have locked in a lower monthly payment for the rest of your life. The reason: Social Security bases your benefit amount on your “full" retirement age Opens in new window, which depends on when you were born. This makes your check about 8% smaller for each year you start taking benefits prior to that age — but 8% bigger for each year you wait past that age (until you turn 70). Given what you know about your health and savings, make sure your timing makes sense.

     

  • Examined your home equity? Even if you haven't paid off your mortgage, your home's value can be a handy resource for expenses you didn't necessarily budget for, like a new car or a pricey home repair. It's also a reasonable way to access cash if you don't want to withdraw from investments in a “down" market. Trading down to a smaller home can also provide cash on hand for retirement costs.

     

  • Checked for post-retirement employer perks? If you've qualified for a pension or health benefits, make sure you understand the process and what rules apply. With a pension, you may have to choose between a lump sum and annuity payments. A lump sum gives you more flexibility, but also the responsibility of investing the money yourself. Your financial professional can help you determine the right strategy for you.

     

  • Hacked your future health care costs? Health care could consume a huge chunk of your nest egg. Researchers at HealthView Services project Opens in new window that combined lifetime premiums for Medicare, supplemental health and dental insurance will approach $322,000 for a healthy 65-year-old couple who retire this year. Make sure to factor those kinds of figures into your income plans.

     

  • Assessed your asset level? Are you on track to meet your retirement savings goals? And do you have an emergency stash to access in case of a crisis or unexpected bills? If you're falling short on either count, do what you can to bulk these accounts up over the next year. This could mean something as simple as cutting back on dinners out, or cutting the cable cord. Slashing a bunch of small expenses can add up a lot over time.

     

  • Considered living costs without a spouse? When a spouse dies, it affects Social Security income, pension income (if applicable) and health care expenses, among other things. Is there life insurance? Have you evaluated what might happen to your assets and whether you can cover your expenses on your own? Make sure your strategy accounts for this scenario. If you are currently unmarried/single, you can skip this question.

     

  • Developed an after-hours income plan? The more income you can generate from your nest egg, the better your chances of beating inflation, weathering market downturns and making your money last. Your results will largely depend on your investment mix and how much — and how often — you withdraw, and getting it right can be tricky. So you should talk to a financial professional about your strategy.

     

  • Done a dry run? To be truly confident in your ability to retire, try living for a month or two on the income you expect in retirement. If it's smooth sailing, great! If not, you may want to rethink your expenses, income or both.

     

  • Reassessed your goals? Now that you are a mere year away from retirement, are you still picturing the same retirement you always have? Does cruising across the world hold the same appeal as it did five or 10 years ago, or are you now thinking that sticking to home and family might be more enjoyable? Now is the time to really think about whether your previous dreams and goals have changed. Understand that it's perfectly OK if you no longer want the same things you did when you were younger.

     

  • Rethought your timing? With retirement so soon in sight, are you sure you will you be ready emotionally as well as financially? It's not too late to rethink your retirement date if need be. An extra year or two of work — assuming both you and your employer are so inclined — could help soothe anxiety with more opportunity to save, a chance to delay (and get bigger checks from) Social Security, and fewer years to fund after work.

     

 

Bottom Line

Now that you’ve read through and answered each question, you can gauge just how ready you are for your impending retirement. If you answered “yes” to all questions, you’re all set. If not, you may need to take care of a few things before you can truly enjoy your retirement.

 

Please consult your tax and legal advisors regarding your particular circumstances.

 

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