10 Essential Factors of a Retirement Planning Checklist

retirement planning checklistIf you are approaching retirement do you know if you are ready?

Do you have the funds saved that you will need?

Do you have all the other details in place and ready to go?

While retirement is an exciting time, it is also a time of big changes in your life.

Not only will you not be going to work every day but you will also have adjustments in your personal life and your finances will also be changing.

To make sure you are prepared for all the changes creating a retirement planning checklist is recommended.

A Basic Retirement Checklist To Follow At Any Age

1. Develop your retirement budget.

Face it.  You have to know how much you need per month to live on.  “Guesstimating” is just setting yourself up for failure. Make sure that you factor in inflation which can be calculated at about 3%-5% per year.

The easiest way to start creating a retirement budget is to look at what you currently spend as a non-retiree. Grab your utility bills, bank statements and credit card statements for the last 3 to 6 months and calculate how much you are spending in major categories like groceries, eating out, and car expenses. These categories may change significantly in retirement, but having an idea of what normal feels like before retirement is a good place to start.

Having trouble tracking down your statements and keeping your bills straight? I recommend using online software like Manilla because you can see all of your bills and statements in one place.

Try out Manilla. This free online software let’s you connect all of your major bills to its system to track your due dates, keep statements archived, and be directed to that bill’s payment page easily. One of my favorite parts about Manilla is you can see everything all under one login with one password instead of having to remember login information for 15 different websites.

Get started with Manilla today to easily start managing your bills. Remember, it’s free. (And they have great mobile apps, too.)

2. Create a retirement plan.

Decide what age you plan to retire at and determine how much you will need to save in order to live a comfortable lifestyle once you do retire. This is something you will want to reevaluate throughout the years.

Many times as we age our living standards go up and you will want to make sure you are saving enough to continue your same lifestyle once you retire.

3. Determine your retirement income.

Look at what sources of income you will have during your retirement. This may include a pension, social security and more.

You’ll have to plan for the unexpected.   Sudden medical bills or a drop in the market can significantly affect your retirement income needs.

4. Look at your retirement accounts every year.

If it’s been over a year since you’ve opened your brokerage statements or logged into your 401k online account, you’re long overdue. Make sure you have saved enough during the past year and that you are on track to save enough before retirement. It is always a good idea to overestimate.

I highly recommend using software tools like Personal Capital to see the big picture of all of various retirement accounts and brokerage statements.

We did a full review of Personal Capital that I encourage you to read, but here’s a snapshot.

A couple could easily have 5 or 6 different firms holding money for retirement which makes seeing your overall portfolio very difficult. Are you overexposed to emerging markets? Do you have enough bond or income investments? It can be hard to tell if you have to check multiple portfolios and start calculating everything by hand.

That’s where Personal Capital comes in. The site gives you a really sharp and intuitive online dashboard where you can see all of your accounts — from checking to brokerage to retirement — in one place. They also state they have a critical two-word commitment to you: fiduciary duty (read our review to learn what this means and why it is so important). You can even get connected to a real investment advisor that won’t try to take advantage of you.

Not only can you solve the problem of tracking your portfolio — Personal Capital crushes that — but you can make sure your plan is on track, too. Open an account with Personal Capital to start easing your retirement concerns today.

5.  Remember: It’s never too late.

If you start saving late, make sure you are saving every penny you can in order to make up for lost time. This may mean taking on an extra job, downsizing your home and more. Keep in mind that it will be easier to sacrifice now compared to later.

6. Get out of debt for good.

Pay down all of your debts and aim to be debt free by your retirement date or even sooner. Getting out of debt early in life will make retirement planning a much smoother process. There’s nothing more terrifying than having a significant drop in income because of retirement and having a mountain of bills to pay.

If you’ve tried to get out of debt on your own but still have some lingering bills out there, I highly recommend using software like Ready for Zero to help you track your progress.

Simply put Ready for Zero is a technology company with the goal of helping you achieve debt freedom. This free software lets you input all of your debts and link your accounts.

Then you create a plan to pay off the debt through consistent payments. The software provides tips along the way, reminders about upcoming due dates, and encourages you to take further steps to get you out of debt faster.

If you are closing in on retirement and still have debt lingering around, I would definitely try out Ready for Zero.

7.  Keep on keepin’ on.

Continue to make retirement contributions to your retirement accounts. If at all possible make sure that you are maxing out your contributions every year.

Don’t forget most retirement options allow you to have a “catch up” contribution once you reach the age of 50 or 55. You can usually save an extra $1,000 per year to further push you toward your retirement nest egg goal.

8.  Keep track of your retirement portfolio.

Continually evaluate your investments, making sure you always maintain a diversified portfolio. As you approach retirement age you may want to consider keeping the majority of your money in non-risky investments. Use tools like Personal Capital to keep tabs on your total portfolio.

9. Determine your retirement health care needs.

If you plan to retire before you are eligible for Medicare you will need to factor in the cost of healthcare into your retirement budget.

While you most likely will be able to get a COBRA package through your current employer, the cost can be high and the plan may not cover all of your needs.

Also consider long term care insurance to pay for things like nursing home costs. Long term care insurance can be costly as well, but the earlier you get into a plan the lower your overall premium will be.

One of your best options is to get a health insurance plan that is custom fit to your specific situation. eHealthInsurance will generate several quotes for you from different insurance companies. Having multiple quotes in front of you makes doing comparisons a lot easier. I would try it out just to make sure I’m not missing a great affordable healthcare plan.

10. Know the rules and regulations of your retirement accounts.

Retirement accounts are all different and if you have saved in multiple accounts it may be confusing how retirement withdrawals will work. Many accounts require you to be a certain age before you can withdraw funds. Additionally, many require minimum withdrawals when you reach a certain age and more. Take the time to understand how your retirement funds will work best for you.

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