Footsteps Toward Retirement

People who are thinking about retirement tend to focus on how much money is in the bank. But planning for retirement is more than a dollar amount. Major life events requires planning and careful actions before you act. Within 5 years of retirement, there are several things you can do in preparation for the big day including researching and verifying what you heard at the water cooler last week.

Happy Retirement: When you are 3-5 years from your hopeful retirement date, it’s important to be thinking about how to make your retirement happy. Consider the answers to these four segments.

· Time: How will you spend your time? Do you have a list of hobbies ready to try out when you stop working? Happy retirees have activities and a structure to their week to encourage them to keep moving forward.

· Social Networks: Who are the people that will brighten your retirement life? Happy retirees have family, friends, or acquaintances in their life. Research shows that seniors with a strong social network live longer, especially if they have people who lift them up vs tearing them down.

· Healthy Habits: How will you maintain or improve habit for healthy living once you retire? Plan now for your exercise routines, dietary needs, and health care.

· Stay Curious: What energizes your brain? Will you read, travel, learn a language or take college courses? What are your topics of interest or social media feeds?

Before Ending Work: Here is a checklist of actions to consider or do when your are 1-2 years away from your retirement date. You choose the order of importance.

____ Analyze your expenses. From that daily coffee to subscriptions, to new car tires how much do you spend in which months of the year?

____ Get all of your medical check-ups before your health insurance expires.

____ Make a health care plan which covers you for dental, vision, routine medical needs, prescriptions, and emergency health issues.

____ Simplify your finances by consolidating multiple or duplicate 401K plans, insurance policies, subscriptions, bank accounts, etc.

____ Eliminate debts! Credit cards, car payments, student loans, and second mortgages should all be eliminated before you retire.

____ Have your financial plan reviewed by a professional. They can help understand retirement taxes, stress-test your financial plan for unsuspecting circumstances, and give you confidence with your income plan.

____ Review your estate plan including beneficiaries on bank and retirement accounts, wills, trusts, and powers of attorney.

____ Communicate your retirement, financial, and estate plans with your family and heirs. Your actions today will impact them in the future.

Transition: Your retirement date is drawing close, but are you really ready for the transition? Some people find success with baby steps into retirement to increase confidence.

· Meet with your company HR specialists. Not only will the tell you the procedures for leaving work, some departments will even help you set up your 401K withdrawals or Medicare.

· Practice living on your retirement wage. For example, if your monthly retirement salary is projected to be 75% of your current working wage, then cut-back on your monthly expenses until you are living every month at 75% of your working wage. Practice living on less.

· Reduce work to part time. In the last 1-2 years before you retire, think about stair-stepping your working hours to 4 days a week or shift your schedule to part time. Sometimes this helps an employer as much as it helps the almost retired employee.