8 Crucial Items for Your Retirement Planning Checklist

By Paul West

Imagine yourself on your last ride home from work on the day you retire. The cardboard box is in the backseat, your gold watch is on your wrist and you realize you don’t have to wake up to an alarm clock tomorrow. 

Are you ready? Is your plan in place? Is that fear or excitement fluttering in your stomach? 

Having a retirement planning checklist can help make this final commute the time of reflection and joy it should be. You can never plan for everything, but having the essentials in place can give you the confidence and clarity you need to do the great work of retirement: doing what you want to do rather than what you have to do. 

Let’s look at eight important items for your retirement planning checklist you can start on today, to make sure tomorrow looks the way you envision it. 

1. Have a Financial Game Plan 

You can’t emphasize the importance of a plan enough. Do you know how you will take money from your 401(k) or IRA, how you will take Social Security, how to be tax-smart with your income planning? There are many details here, so the first step is to meet with your advisor and make sure you know which I’s need dotted and T’s need crossed.

Find out how prepared you are: Take the Retirement Readiness Quiz today!

2. Create a Budget 

Once you have your plan in place, it’s time to budget – which is basically putting your plan into practice. You don’t have to go down to the penny (that will drive you crazy), but put some guardrails up that will help you stay on track.

You’re going to have more free time than you’ve had since you were a teenager, and you’ll have more money than your teenage self ever dreamed of. Developing financial discipline early on will help you for the long haul.

Maybe you have $100,00 in your 401(k), which is about the national average. Over a 30-year retirement, that comes out to around $3,300 annually! Barely enough for a few car payments, not an income. The need for clear budgeting will make itself apparent quickly.

If you’re within ten years of retirement, one idea to try is to do a practice period of living within your planned retirement means. For instance, if you’re planning to live on $40,000 a year after you retire, see what it’s like to do six months on $20,000. You’ll get a pretty good idea of what challenges lay ahead. 

Listen: Ron Carson discusses “Maintaining Your Wealth in Retirement”

3. Have Your Healthcare and Long-term Care Insurance in Place 

The average 65-year-old couple will need about $280,000 to cover healthcare costs in retirement, and that doesn’t include long-term care. According to Forbes, nearly 70% of all people who live to age 65 will require some form of long-term care. 

These are risks too great for the average person to bear, let alone two members of the same family. Rather than transferring these costs to your kids (and grandkids), invest in long-term care insurance sometime between the age of 50 and 60. 

Learn more: “5 Reasons to Think About Long-Term Care Planning Today” by Jamie Hopkins, Esq., LLM, CFP®, ChFC®, CLU®, RICP®

4. Be Social Security Smart 

Taking Social Security at the right time and in the right way is crucial to your overall financial plan. The wrong approach could cost you thousands in benefits over the years – not to mention an avalanche of taxes and increases in your Medicare premiums. 

Learn more: “Retirement and Social Security: What Baby Boomers Need to Know”

5. Manage Risk 

Casinos give you chips to throw you off. You’d hesitate a lot more before dropping two fifties on the table, but two blue chips don’t feel so bad. This kind of misdirection often happens to people’s portfolios, too. 

This is real money with real implications. Managing risk shouldn’t just be a matter of intuition in the moment, which is often influenced by fear, recency bias or other emotional instincts. One of the most dangerous things for an inexperienced investor is themselves. Most people aren’t great investors, but it has nothing to do with lack of knowledge and pretty much everything to do with lack of patience.

Learn more: “Conviction: A Portfolio Manager’s Secret Weapon”

6. Be Tax Proactive 

You can do as much to stop taxes as you can to stop earth’s rotation, but you can be smart about them. In your retirement years, this is especially important as the tax landscape will change for you drastically. 

You’ll be taking withdrawals from accounts, maybe a few of them, and you need to know the income tax implications there. Whether we’re talking about RMDs or Social Security benefits, the right approach can keep you safe from unnecessary tax hits. 

In addition, the Tax Cuts and Jobs Act has moved the goalposts for a lot us with taxes, and taking advantage of savings and strategy here is key. Your financial advisor can help you be proactive when Uncle Sam comes knocking.

Download the guide: “8 Legitimate Tax Loopholes You May Be Missing”

7. Diversify Your Income Plan 

Retirement isn’t just about the money you have saved, but how you plan your retirement income. Tax-smart, strategic planning with 401(k), IRA and social security gives you a better approach than simply trying to avoid spending money, and you can take this a step further. 

Diversifying through alternate investments, real estate, etc. can give you other streams of income sometimes even better than traditional means. But work closely with your advisor as the tax implications may be even more complex. Strategies such as using a Delaware Statutory Trust for real estate investments will help you keep more of your money in your pocket. 

Learn more: “How to Avoid the Top 3 Fears in Retirement”

8. Update Your Legal Documents 

Make sure your documents are up-to-date, not just once, but in a cadence of every four or five years. The size of your estate changes, the make up of your family changes and the laws change – maybe not quickly, but without a doubt. 

You probably don’t want your ex-son-in-law to inherit part of your estate, and you can’t have a deceased relative making decisions as your executor. The dynamic realities of finance, family and legal issues make it important that your documents are refreshed regularly. 

Don’t put it off! “Why You Need a Will (and You Need One Today)”

These Years Are Golden

Retirement is a time for reflecting on life and deepening your most important relationships. Free yourself up in those days by working with a retirement planning checklist to prepare, strategize and invest. 

Talk with your advisor today about a plan that works for you, because wasted energy and time in these years aren’t losses you can easily recoup.

This article is designed to provide accurate and authoritative information on the subjects covered. It is not, however, intended to provide specific legal, tax, or other professional advice. For specific professional assistance, the services of an appropriate professional should be sought