The Complete and Only Retirement Planning Checklist You’ll Ever Need

Did you know that most Americans plan to retire at the age of 62? Baby boomers, on the other hand, plan to retire later at the age of 68. Regardless of when you plan to stop working, wealth management and future planning can be the difference between retiring in comfort or with trepidation.

This is because the Social Security benefits you receive only go so far–especially when you plan to retire earlier. The Medicare eligibility age in the United States only begins once you turn 65. 

With this in mind, read on for our simplified retirement planning checklist that will clear the confusion and get you invested in your future today! 

Build Your Emergency Fund

Before you even begin saving for retirement or managing your debts, it’s recommended to start building an emergency fund before anything else. This fund is based on all of your expenses per month. If you suddenly don’t have an income, your emergency fund is used to help keep you afloat until you find other options.

With this in mind, you want your emergency fund to be able to last you at least three months, though some recommend up to six months or a year. Choose a number that you feel the most comfortable with and move this money from a checking to a savings account so that it’s easy to access if you’re ever in need. 

Eliminate Your Debt

Next, you’ll want to start working on eliminating as much debt as possible before you retire. Moving into retirement with debt means the money that could be spent on your everyday living expenses is instead going to creditors. This means it could be a serious drain on your fixed income.

It’s recommended to start whittling away at debts with the highest interest rates in order to save as much money as possible. However, you can also work on paying off your debts with the smallest balances, as those small wins will keep you motivated. 

The more debt you pay off, the more money you’ll have in your pocket come retirement! 

Set Realistic Expectations

Once you’re done paying off most of your debt and creating an emergency savings account, you’ll next want to plan out how you want to retire. Be realistic about your monthly expenses as well as where you will want to live.

You’ll also want to estimate how long you’ll be retired–consider how long your grandparents and elderly relatives were retired to come up with an approximate number.

While you’re setting your expectations, consider all of your income sources, such as: 

  • Social Security benefits
  • Employee-sponsored retirement accounts
  • Individual retirement accounts
  • Wages
  • Pensions

If you’re having trouble comparing your pre-retirement income to your post-retirement earnings, remember that you can seek the help of retirement planning specialists. Along with helping you make smart investments, they can also give advice when it comes to estate planning or investment diversification.

Learn About Retirement Investments

Beyond the money you’ll have in your retirement accounts, pension, and Social Security, you may also want to look into retirement investments. It’s always important to seek the help of a professional, as you don’t want to make investments that are too risky when you’re nearing the age of retirement.

However, investing in a diversified portfolio can help you earn passive income in a smart way so that you can retire in comfort. This can be in real estate, mutual funds, government bonds, and more. You’ll have greater peace of mind once you discover ways to enhance your earning potential. 

Don’t Forget Health Insurance

Remember that when you retire, health insurance becomes even more important as you get older. According to a paper in the Retirement Management Journal, average annual healthcare expenses are 15% of total retirement spending.

Many professionals recommend breaking down a lump sum number into annual numbers in order to get a better idea of how to plan for health insurance once you retire. 

For instance, a 65-year old couple spends an average of $11,400 on healthcare during their first year of retirement. It’s recommended to budget for health insurance by saving your money in an HSA. If you don’t have an HSA, you can also allocate about 15% of your savings into a separate saving account for your healthcare costs alone. 

Plan Your Legacy

Last but not least, once you’re near the age of retirement, you’ll want to start planning for your estate. Although planning for what happens to your estate after you pass away may seem dark, keep in mind that you’re just looking after the future of your family. You don’t want them to be burdened with debt once you’re gone. 

With this in mind, make sure you create a will so that all of your assets can be used the way you see fit. You’ll also want to assign power of attorney to someone you trust if you’re no longer capable of making decisions for yourself. 

Next, you’ll want to assign guardians for any living dependents you have as well as beneficiaries of your life insurance. Keep in mind that you’ll want to take a look at your plan every few years to ensure that you don’t want to change anything. 

Start a Retirement Planning Checklist for Peace of Mind 

Retirement planning can seem overwhelming if you haven’t started yet. However, keep in mind that the sooner you start, the better. Break everything you need to do down into steps with a retirement planning checklist.

Start by creating a three to six-month emergency fund so that you’ll be safe in the event that your income is cut off. Next, take care of your debts so that you have more money going towards living expenses when you retire. 

Lastly, consider the help of a professional in order to work on other retirement investments and setting the right expectations. 

Ready for more tips on how to retire in comfort? Keep reading the blog for more informative articles.

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