Retirement Planning Checklist to a Worry Free Life
Retirement should be worry-free, but many in the United States don’t have any retirement savings. Your goal should be to retire with as little stress and worry as possible.
It’s possible, but you’ll need to make sure that you begin securing your retirement today.
We’re going to outline an eight-point retirement planning checklist to help you retire worry-free.
8-Point Retirement Planning Checklist
1. List All of Your Retirement Goals
You can’t know where you’re at in reaching your goals if you haven’t defined them yet. Planning starts with your goals. Make a list of answers to the following questions:
- What is your definition of a happy retirement?
- Want to travel? Which destinations will you go to?
- Want to spend time with family? How often will you travel to see them?
- Would you like to move closer to family?
- How much money do you want to spend or give away during retirement?
- Will you help pay for a grandchild’s college education?
While this step may seem tedious, it can really put your retirement into perspective.
2. Know Your Numbers
Retirement is all about numbers. Money is a number’s game, and throughout your lifetime, you likely have made and contributed to a lot of accounts. You need to know how to access these accounts, how much money you have in them and where your money is allotted.
You may have an IRA, 401(k), annuity, brokerage and several other accounts.
When you have all of these accounts available and know their numbers, you need to consider your spending. Spending habits will typically have three main parts:
- Needs, or money to live
- Wants, or money to use for vacation, etc.
- Legacy, or money you would like to give away
You’ll need to consider that your money will come from your IRAs and 401(k)s, and then consider your income from Social Security, pension or other income streams.
Inflation will also play a role in your retirement planning because you’re not earning anymore, yet prices are still going up. All of these numbers will help you better know your financial situation when retiring.
3. Social Security’s “Big Picture”
When’s the best age to retire? Most places will tell you 70 – that’s a long time to wait. You can retire at 62, 67 or 70. Sure, the earlier you retire, the less you’ll receive. There’s a lot more to consider.
The moving parts may mean taking your Social Security earlier is more beneficial.
4. Educate Yourself on How to Invest Your Savings
Retirement savings should be invested. You’ll find two main forms of investing: active and passive. The main differences are:
- Passive. You’ve likely been doing this for a long time. A 401(k) is passive in that you buy, hold and don’t do anything else. People that bought into Amazon back when it IPO’d, for example, have likely held on to it and reaped the benefits. Rebalancing may occur where you change up your asset allocation slightly, but it’s not on the level of an active investor.
- Active. You manage the portfolio daily based on the current market. This is a time-consuming strategy, but you can hedge your losses and control your risk tolerance best.
Educate yourself on these two methods of investing your retirement savings, and you’ll have greater control of your retirement planning.
5. Understand Medicare
An integral part of your retirement planning checklist is to understand Medicare. Your health is so important, and we recommend talking to a Medicare expert. You need to have a plan to take care of Medicare.
There are a lot of options available, and they’re very complex with gaps.
At least one year prior to retirement, sit down with an expert that can help you understand your Medicare options, what’s covered, what’s not covered and how you can cover some of these gaps.
6. Put Your Legal Documents in Order
Estate planning is an essential part of retirement planning. Sit down and look over your estate planning documents. We’re talking about your:
- Wills
- Trusts
- Power of Attorney, etc.
Have an attorney overlook your will. Have things changed since you’ve had these documents drafted? Update your legal documents to have the beneficiaries up to date. Do this with all of your documents.
7. Long-term Care Planning
People are living longer. Hopefully, you never have to go into a long-term care facility, but if you do, it’s a major expense. There are different layers of expenses:
- Assisted living
- Nursing care
You can self-insure these expenses, or you can take out an insurance policy that rises throughout your lifetime. Hybrid plans also exist, which will have long-term care plans and possibly life insurance in one.
Deciding how to cover the costs of long-term care will help you sleep well at night knowing that you can have a basic plan if you need help in the future.
8. Write Out a Retirement Income Plan
A written retirement income plan seems daunting, but it’s an integral part of every retirement planning checklist. Your retirement relies on your plan. There are a lot of items included in your plan that you’ll outline:
- Retirement accounts
- Expenses
- Future expenses
- Renovations
- Car purchases
- Inflation
- Paying for your grandkid’s childhood expenses
When you think through almost everything that you can before retiring, you’ll have a plan to refer to and update as needed. You’ll also be able to see how your current actions are impacting your retirement.
If you follow these eight points, we’re confident that you’ll be on the path to a worry-free retirement.
Need extra help or want to follow a proven program for retiring with peace of mind. Our 4 Steps to Secure Your Retirement mini course can help.
Click here to learn more about our course and how we’ll help you secure your retirement.