A Brief Checklist for Pre-Retirees

If you’re feeling lost about where to start preparing for your retirement, this article is for you. It may be difficult for you to find good retirement advice—as Americans, we tend not to like to talk about money. And even if you do have someone to talk to, you can never be sure if the advice of your friends and family is sound, so we’ve put together a small checklist to help you understand the big steps you’ll want to think about as you head toward retirement.

1. Make a Plan

This seems almost too simple, but one of the most important steps is to sit down and start planning. The sooner you do this, the sooner you may realize that there are more unanswered questions than you thought about your future and retirement stability.

First, ask yourself what you want out of retirement. Don’t worry about the practical side yet. Then, once you have a good idea of what you want to do with your time in retirement, consider the more practical side of things like how much you have saved, how to turn those savings into income, and other tools and assets that can support your lifestyle.

These steps may help you to get a better sense of what you want and what you need to do. It’s easy to keep putting off your retirement plan, and it’s easy to just avoid the subject, but getting everything nailed down and specific may help you feel more comfortable with taking the financial actions you need to take to get the retirement you want.

2. Consider How Much You Have Saved and Consider Your Income Sources

Once you get a sense of what you want out of your retirement, it can be useful to take stock of what your retirement income streams will be and how best to construct, protect, and maximize them. Taking the time to examine what you have and how it can be transformed into a steady stream of income is key. Many people just get their retirement paperwork in the mail and never really look at it or what any of the numbers mean. Remember, saving is one thing; it’s another to turn that savings into what sustains your life.

3. Strategize for Social Security

Are you going to wait as long as possible to get your benefits, or are you going to claim sooner? Keep in mind that everyone has a different situation, and every situation requires a different Social Security strategy. Getting a sense of when you’ll claim and estimating how much you plan to get can be a good thing to check off your pre-retirement list. Having a good estimate of these numbers will help you to know what else you may need to supplement your income.

4. Understand the Tax Burden of Your Retirement Income

Keep in mind that many retirement income sources are taxed! Depending on how much is subject to tax, you may have less than you anticipated when it comes time to use your savings to cover your costs.^[1] But keep in mind that there are strategies to help you reduce your tax burden in retirement! Having a good strategy for how to handle your taxes in retirement might help you save some money once your retirement starts.

The last suggestion we have for preparing for retirement is to consider a financial professional. We work with people to help them design a retirement plan that takes their needs into account, and we have years of industry experience that will help us guide you in the face of a complicated and critical planning step in your life. A financial professional may do so much more for your retirement than a checklist ever could.