Financial Retirement Checklist – A Complete Guide

Retirement is a time of celebration and relaxation, an opportunity to take time to do the things you enjoy in life. However, the financial aspect of planning for retirement can be challenging. So prepare ahead of time for this transition to avoid unexpected costs and unpleasant disappointments. To assist you in this transition, we’ll provide you with a comprehensive financial retirement checklist below. This checklist should help guide you towards financial readiness. 

Determine your retirement income sources 

Confirming what retirement savings and sources you can count on can help you determine how long each source will provide for and how much income each source will yield. Here are some examples of income sources that you need to investigate: 

• Annuities
• Savings accounts
• Life insurance values, if any
• Income from investments and retirement funds
• Pensions
• The value of your personal property and real estate

Work out how much tax you will pay on your retirement income sources

Tax is calculated differently on diverse forms of income. Many people use the combined value of retirement funds to work out the income they will have at their disposal, but this is an oversight. Tax payable on your sources of income needs to be determined so that you have a realistic idea of your financial retirement income and that you aren’t blind-sided later. 

Investopedia has a helpful article on understanding how different sources of income are taxed. 

Calculate your retirement expenses

The amount of income required for retirement differs from person to person. This amount is calculated based on how much you will need for day-to-day costs and how your approximate retirement income aids that. If the projected amount is too low, retirement financial planning goals need to be adjusted to help you remain realistic about your budget.

The following expenses are good examples of what you need to bear in mind when doing financial retirement planning:

• Health care
• Insurance 
• Taxes
• Leisure expenses
• Living expenses
• Housing expenses

Set a retirement date that suits your financial planning needs

Setting a date is the foremost aspect, as it affects the bulk of financial retirement planning. It requires one to ask the necessary questions to help determine the date that suits them best. 

Are you emotionally ready to stop working?

For some people, their career and identity are closely correlated. If you are proficient at work and enjoy what you do, you may want to scale back on the hours at work instead of retiring altogether. It may provide a sense of fulfillment as you can stay in contact with peers and continue to generate an income.

If you have a significant other, do they plan to retire soon?

If you retire at different times, they may not be able to partake in activities with you. How this affects your decision is dependent on your own goals and how you’d like to spend your time. The best way to establish expectations is to communicate your daily schedule and domestic responsibilities and prepare a plan that works for both of you.

Can you afford to retire?

If you think you may not have saved enough, we suggest pushing your retirement date forward by a few years. Continuing to work can assist in reducing debt and increasing your savings. Discuss your situations and concerns with a credible financial advisor. A professional may advise you to consider re-distributing some of your funds into more profitable investments.

What is your retirement wish list?

Whether you want to start a project, write a book, play more golf, or donate time to charity, you must have a clear mindset on what you would like to do once you take this rewarding step in life. It will guide you in choosing the best time to commence your retirement. If explored in more depth, this financial retirement checklist should assist with ensuring total financial readiness when the time comes.

*Disclaimer: This blog post was inspired by excerpts from an article originally written by Aging in Place. To read this version, click here.