Houston Estate Planning and Elder Law Attorney Blog
Use this checklist to be certain that you and your finances are properly prepared for retirement.
According to The Center for Retirement Research at Boston College, 20% of Americans are wrong about when they’ll be able to retire. That also means that 80% have it right—which group do you belong to? To make sure you are in the right group, take a look at this checklist from The Street, “8 Essential Steps to Achieve Retirement Success.”
Determine and Test Your Retirement Budget. Do a dry run of your future retirement lifestyle for six months before your intended retirement date. This will help you get a better understanding of how you can follow your retirement budget.
Get Rid of Debt and Downsize. If you begin your retirement with large amounts of debt, it can be trouble. Before you stop working, pay off any high interest debt to avoid having to make these payments in retirement. Consider where you’ll live in retirement and the money you can save by downsizing.
Look through Your Portfolio. You should balance growing investments, preserving capital and generating income. This prioritization will change over time, but your portfolio should be able to handle both your current and future financial needs.
Talk About Social Security with Your Spouse. To get the biggest payout of your Social Security benefits, you need to have a strategy in place. Your monthly benefit will differ significantly, based on the age you start receiving benefits. This will also impact the amount your surviving spouse may receive. Speak with your spouse about who will file for benefits and when. Don't be afraid to get a professional opinion, if this is overwhelming.
Review Your Estate Plan. Before you start your retirement, make sure that you have drafted your will and powers of attorney (POA). Talk to an experienced estate planning attorney.
Talk to Your Kids. If your adult children are still depending on you financially, begin a dialog to make them more independent. Even though it will be tough, it’s critical that they understand how your estate plan will affect them in the future.
Let Go of the Emotions. There can be mixed feelings about retirement. Therefore, it is very important that you and your spouse talk about how you’ll spend your free time and prepare for the changes in your routines. You should also agree on the other aspects of preparing for retirement, like determining your budget and lifestyle choices.
Remember the big picture. Planning for retirement is a complicated process, bringing together legal, financial and family matters. You have to address the details, but keep your eyes on the prize: an enjoyable, stress-free retirement. Review the checklist periodically to see how you are doing.
Reference: The Street (April 12, 2018) “8 Essential Steps to Achieve Retirement Success”