Whenever you are going to go on a long trip whether it is alone or with your family, you always make it a point to use a checklist so that you can make sure that you did not forget anything back home, right? It would be more than just annoying to finally get to the beach and start unpacking the car only to find that you left the ice box filled with all the drinks sitting in the garage. It is a rough comparison but retirement is a lot like a long haul trip – you need to prepare for it beforehand and get everything ready before you set out to live the retired life. The difference is that you come back from the trip. You do not come back from retirement (ideally, that is how it should be). Retirement planning is something that can never be emphasized enough. Having a pre-retirement checklist to follow through with as you retire will help you prepare for what is to come without panicking or it might just give you that necessary reality check.

The pre-retirement checklist is something that we have put together because when retirement comes slowly creeping towards your door, you can use all the help you can get to be prepared for it. Here is the pre-retirement checklist that you can use to make sure you have a better retired life. We have given five year timeframe that we feel is an ideal time for you to prepare.

The Five Year Mark – Retirement Planning

Five years before retirement might seem like something that is still a very long time away. You know how they say that time flies, right? Yeah, these five years that might seem like a very long time away will pass you by like five second when you are on the brink of retirement and you did not plan anything. Retirement planning should start as early as possible and we feel that the last five years before retirement is the last threshold for you to retire more comfortably with planning.

Five years before retirement is when you whip out that calculator and start running those numbers, folks. Start estimating your spending during the retirement years and your sources of income once you retire. There are a lot of resources online that can provide you retirement calendars so that you can begin calculating and start dreaming about how your life will be once you retire. This is also the best time to actually begin tracking what your net worth is.

In some respects, five years actually is a lot of time. In fact, all the calculations that you do and the details of your retired life that will be calculated right now probably will not be completely accurate. Five years is still a bit of time for things to change and a lot of them will. The reason why it is important to start planning for it five years beforehand is so that you start thinking about the kind of lifestyle you will have during your retirement. Use this time to think about how your life is going to be after retirement because that will determine how much income you will be requiring during your retirement and that requirement will be a determining factor for the date that you actually retire. Put your mind on the kind of lifestyle you want for these five years and try to get a good grasp on the kind of lifestyle you want during your retirement and what you can realistically get.

The Five Year Mark – Pre-Retirement Checklist

  • Here is the pre-retirement checklist that you should be looking into five years before you retire:
  • Focus on and try to determine the lifestyle you want after retirement.
  • Assess and estimate the spending you will be doing during your retired life and determine the possible income opportunities during your retirement.
  • Start tracking your net worth.
  • Use online resources to find and run retirement calculators (you can easily find loads of them with a simple Google search).

The Three Year Mark – Retirement Planning

As the years slowly start to pass and you approach the last three years before your retirement, you have to revisit your retirement planning. This is the point where your savings are supposed to go into overdrive. When you are this close to your retirement, the income you have from your job is as high as it has ever been before this. Take advantage of this and capitalize on any of the catch-up provisions you might have set up in the accounts for your retirement.

This is when the numbers are something you have to consider with a renewed seriousness. When you are three years away from your retirement, it is ideal to track your spending for a whole year so that you have a good idea of what your spending might be like. This way, your estimates will become more specific.

You can use all the updated numbers and start working on building a cash flow model for your retired life. Make use of the retirement calculators again and this time, you need to go into more details when you enter the numbers for the calculations using the data you have over the year you have tracked your spending. If there is any money that you owe to someone, this is the time where you have to pay off the debt(s).

The three year mark in your retirement planning is when you start getting a realistic picture of the cushion you will need to live a comfortable retired life.

The Three Year Mark – Pre-Retirement Checklist.

Here is the pre-retirement checklist that you should be looking into three years before you retire:

  • Build a cash flow model for your retired life.
  • Track the spending that you will make over the course of a year ideally. Tracking the spending over half a year also works very well.
  • The sum that you come up with after tracking your spending over the course of the year, multiply it by at least 20 to get a good estimate of the amount of money you will need during your retirement.
  • If you have any debts that you need to pay off, make sure that you have a plan in place to relieve yourself from it before your retirement comes.
  • Get a good grip on the prospects of Social Security income. There are many claims that you can make for your Social Security income. Review the strategies and get an estimate of the income you will be getting from it.
  • Note down the biggest expenses that you are going to be liable to pay up, like taxes. This is something you can get a specific number on rather than a rough estimate.
  • Possibly consider hiring the services of a professional that can help you prepare for your retirement by figuring out all the tiny financial details and anything that you might miss out on.
  • Seriously consider the prospects of Long Term Care insurance. Three years before your retirement, this is something you will find very useful once your retired life is well underway.

 Two Year Mark – Retirement Planning

Now we come to the two year mark in your retirement planning. This is when there are no jokes to be played and things are getting more and more serious. During the course of your retirement planning up until now, you will have thought a lot about the kind of lifestyle you want in your retired life. If you have not had the discussion yet, the two year mark in your retirement planning is when you should talk to your spouse and decide where you will be living the rest of your lives.

When you are considering possible prospects for the place you will live in during your retirement, going to vacation in the possible places can help you get a better idea. Your spouse and yourself can decide better on where to live if you have spent time there. Review the real estate market in the potential places and get a timeline together for selling your current residence. Plan what you will do with all the things that you have right now but will not need (we recommend selling them).

If you have plans to retire a little early and you will not have access to the retirement accounts when you do, you need to make sure that the after-tax savings that you have are going to provide you enough of a net to fall back on so that you can ease through the initial years of your retired life. You should also use this time to plan a long vacation for you to spend some time in a mini-retirement based on your outlook on how your retired life should be like. This will give you a realistic idea of your retired lifestyle.

Two Year Mark – Pre-Retirement Checklist

Here is the pre-retirement checklist that you should be looking into two years before you retire:

  • Start tracking your progress so that you get a better idea of when you should ideally retire.
  • Plan a long vacation and go through a mini-retirement in that time so that you get a reality check on the post retirement lifestyle you want and what you can actually achieve. It’s an important aspect of your pre-retirement checklist at this stage.
  • Give yourself a trial run and try to live on the projected retirement income during your retirement to see how you will have to manage and if there is anything you need to adjust when it comes to your cash flow during your retirement.
  • Consider the prospects of insurance policies designed for post retirement life.
  • If you are planning to retire earlier than you can get access to your retirement accounts, figure out how you will bridge the gap for your financial needs during that time.
  • If you plan on moving once you retire, scope out possible locations by spending time there and getting a grip on what the real estate market is like over there.

One Year Mark – Retirement Planning

The time that your retirement planning will start to come in handy is about to arrive by the one year mark. This is when you have to move around the investment portfolio you have and adjust it so that you can start making withdrawals. Conduct a review of all the assets that you have and where you have allocated them. You need to create a buffer for some cash because there is always a chance of you facing a Sequence Risk. The cash buffer will protect you from it. Finalize your strategy for retirement and figure out the specifics of how you will be facilitating your retirement income annually.

All the plans which you have in place for health insurance after retirement have to be finalized within the year of your retirement. One of the most important aspects of your retirement planning a year before your retirement is to deal with any and all medical issues you might have to get checked out while you are on the insurance plan that your company is providing you.

All the plans which you have in place for health insurance after retirement have to be finalized within the year of your retirement. One of the most important aspects of your retirement planning a year before your retirement is to deal with any and all medical issues you might have to get checked out while you are on the insurance plan that your company is providing you.

One Year Mark – Pre-Retirement Checklist

Here is the pre-retirement checklist that you should be looking into one year before you retire:

  • Install an app on your phone that gives you a countdown for every day you come closer to your retirement. Use the pressure that it will put you under to keep up with tracking all your progress.
  • If you plan to move when you retire, determine when you will be selling your current residence.
    List down everything that you want to do during your retired life.
  • Make sure all the documents for your estate planning are accurately depicting your retirement plans.
  • The final year is when the contributions to your retirement accounts have to be in overdrive
  • Finalize your strategy for making Social Security claims.
  • Start socializing with people other than your friends from work and professional circles (yes, it is an important aspect of your pre-retirement checklist).

Final Thoughts

When you retire, it is one of the biggest changes that you will experience in your life. Make sure that your retirement planning is comprehensive and have as much control over the circumstances of your retirement and the lifestyle you will live. Use the pre-retirement checklist which you now have and plan a great retirement. Wishing you the very best of luck with your retired life.

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