Your Pre-Retirement Checklist, Ep #68

Pre-Retirement Checklist When making your retirement decision, you likely get one chance to get it right. These type of situations are where checklists can shine. Understanding all your financial opportunities pre-retirement, can make life-changing differences in your retirement journey. Which is why on today’s episode, we are giving you our beautifully detailed Pre-Retirement Checklist to help you make the best of your transition. Because the decisions you make now will have a lasting impact on when and how you can retire. This checklist provides you with a detailed step by step approach to giving you the tools to prepare for your best retirement.

“Good checklists…are precise. They are efficient, to the point, and easy to use even in the most difficult situations. They do not try to spell out everything–a checklist cannot fly a plane. Instead, they provide reminders of only the most critical and important steps–the ones that even the highly skilled professional using them could miss. Good checklists are, above all, practical.”
― Atul Gawande, The Checklist Manifesto

Pre-Retirement Checklist Download

What Will Retirement Look Like?

Answering this question brings a smile to most people, as they secretly picture the time they’ll have to do all the things they’ve put off. But the biggest secret is some of the biggest financial opportunities occur just before and a few years after retirement. Lowering taxes in your highest earning years, and maxing low tax brackets in the first few years of retirement helps you hold on to more of your hard-earned savings. With so many things to focus on during the retirement transition, maximizing all opportunities is difficult without reminders. Enter the pre-retirement checklist. With 60 items highlighted, you’re sure to find something to look in to for your own situation. With a plan this detailed, you can be assured you will feel confidence in your retirement transition.

We are not built for discipline. We are built for novelty and excitement, not for careful attention to detail. Discipline is something we have to work at.” 
― Atul Gawande, The Checklist Manifesto

How Much Can You Spend?

Surveys show when planning for retirement, a major concern is knowing how much you’ll have to spend in retirement. Figuring out where income will come from is a significant part of retirement planning. Retirement income can come from social security, pensions, retirement savings, part-time work, and passive income. Knowing how you spend your money informs how much income you will need. Tracking 12 months of spending prior to retirement gives you a great start, but when forecasting you’ll want to understand how your priorities will change throughout retirement. Taking time to work through the pre-retirement checklist helps spur thinking about how spending may change.

The Tax Diversification of Your Net Worth

Before you retire, taking inventory of assets and debts gives you meaningful feedback. You’re now planning to start taking money out of all the accounts that you have nurtured and grown for so long. This actually may be challenging to watch as your savings begin to diminish. One of the more popular (and longest) sections of the pre-retirement checklist helps you understand how you can save more in taxes. Tax diversification helps structure your assets to be as tax efficient as possible, whatever your tax bracket. Taking a tour through the full pre-retirement checklist will help you achieve the most successful retirement for you and your family.

Insurance Decisions

Insurance may be the biggest question in retirement these days, especially health insurance. Planning to retire before you are eligible for Medicare is creating a conundrum of choices for pre-retirees.  For many COBRA will be your choice for up to 18 months after you leave your job.  However, if you’ve diversified your savings effectively, you could find cheaper health insurance on the federal exchange via a subsidy.  This takes specific tax planning annually. Outside of health insurance, you may not have thought about long-term care insurance, but it’s something you should consider with the rising costs of long-term care. Working with a financial advisor, allows you to model potential scenarios of extended skilled nursing situations providing feedback if you can self-insure or not.

Outline of This Episode

  • [1:27] Our pre-retirement checklist
  • [4:29] What are the big decisions that you have to make in retirement?
  • [9:30] Where is your income going to come from?
  • [15:00] What is your net worth?
  • [21:41] How can you save more in taxes?
  • [23:49] Where will you get insurance?

Resources & People Mentioned

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