The Ultimate Pre-Retirement Checklist

If you’re within 5 years of retirement, this “Ultimate Pre-Retirement Checklist” post is for you. 

In it, I lay out a complete checklist, starting 5 years out from retirement.  In addition, I’ve added links in each time period for relevant articles I’ve written.I’ve also created this infographic, which summarizes this checklist into an easy to read graphic.

Regardless of where you are in your journey, I hope this checklist helps you Achieve A Great Retirement.

 

The Ultimate Pre-Retirement Checklist

3 Years ago, I started a Google spreadsheet with a checklist of things I wanted to sort out before my retirement.  The checklist was laid out chronologically, and I’ve continued to maintain that spreadsheet as I’ve crept ever closer to my June 2018 retirement date. It includes too many personal and tactical items to be included here, but it was my basis for this post. I’ve found my checklist to be quite helpful, and it’s my hope that this post will be of use to you as you plan for your retirement.

The Ultimate Pre-Retirement Checklist to keep you on track as you build your plans for retirement. Click To Tweet

I’ve written numerous posts on the items contained in this checklist.  To assist in your retirement planning, I’ve included relevant posts in each section below.  My intent is to give you the tools to go as “deep” as you need to as you work through the checklist items.  I trust the information will be valuable to you.


Retirement – 5 Years

It seems like it’s still a long way off, but you’ll be surprised how quickly the time will fly.  It’s time to run the numbers, and begin to estimate your spending needs and your retirement income sources.  Start playing around with retirement calculators, and begin dreaming about what your life will be after retirement.  If you’re not doing so already, start tracking your net worth.

With 5 years to go, it’s not critical to get all of your retirement details exactly right.  A lot of things will change between now and retirement.  What’s important is to begin thinking about your retirement.  Take the time to dream about what you want your lifestyle in retirement to be.  The lifestyle you choose will determine how much income you need, and the income requirement will dictate the date on which you’re able to retire.  Focus on the lifestyle, you have a few years before you need to get into the more serious details.

 

5 Year Checklist:

  • Begin thinking about your retirement lifestyle
  • Estimate retirement spending levels, and income sources
  • Track your net worth
  • Run at least three retirement calculators (including this one from NewRetirement)

5 Year Articles:


Retirement – 3 Years

The years are passing by, and it’s time to supercharge your savings.  You’re likely making more money than you’ve made at any point in your career, so take advantage of any catch-up provisions in your retirement accounts.  It’s time to start getting more serious about your numbers.  My wife and I tracked our spending for an entire year when we were 3 years away from retirement, then built a retirement cash flow model using our projected spending numbers post-retirement. Take some time to run those retirement calculators again, but be a bit more detailed in the estimates you enter in the model.  Start thinking about eliminating any remaining debt, and start zeroing in on how much of a nest egg you really need to retire.

3 Year Checklist:

  • Build your first retirement cash flow model (use my template)
  • Track your spending for 6 months, or a year (use my spending tracker)
  • Multiply your estimated spending by 25-30X to get a targeted portfolio value for retirement
  • Develop a plan to eliminate 100% of your debt by retirement
  • Estimate your Social Security income under various claiming strategies.
  • Capture your “large” annual expenses (e.g., real estate taxes), and write down the figures.
  • Consider hiring a Financial Professional to give you an opinion on your retirement readiness.
  • Evaluate Long Term Care insurance.  The best time to buy is in your 50’s.

3 Year Articles:


Our 2 Year “Refrigerator River Journey” To Retirement

Retirement – 2 Years

It’s time to get serious.  If you haven’t already, spend time talking with your spouse to decide where you’re going to live in retirement and design your retirement together.  Spend a vacation in a few areas you’re considering, and begin reviewing the real estate markets in your targeted areas.  If you’re going to be downsizing, put together a timeline for the sale of your primary residence, and figure out what you’re going to do with all of your “stuff” (we sold all of ours in 24 hours).  Start planning for your retirement timing, and find a fun way to track your progress (my wife drew the “Retirement River Journey” above, and we’ve enjoyed checking off the months!).

If you’re retiring before you’ll have access to your retirement accounts, make sure you’re building your After-Tax savings to provide a bridge through your early years of retirement.  Start exploring new hobbies that interest you, and begin building activities which could provide “Purpose” post-retirement.  Schedule an extended vacation to “pretend” you’re retired and think about what you want your post-retirement lifestyle to be.

2 Year Checklist:

  • Find a fun way to track your progress toward your targeted retirement date.
  • Schedule a 10-14 day “mini-retirement”, and think about what you want your retirement to be.
  • Consider living on your projected retirement income for 1-2 years prior to retirement as a “trial run”.
  • Begin evaluating post-retirement insurance options.
  • Consider buying an independent life insurance policy.
  • If you’re retiring early, figure out how you’ll bridge your spending needs to retirement accounts.
  • Begin exploring areas which could become your Purpose in post-retirement.
  • If you’re planning on moving for retirement, spend some time in your targeted retirement location.
  • If you’re relocating, consider buying your retirement home while your income allows you to secure a mortgage.
  • Consider setting up a Password Keeper (I use LastPass) to retain your info post-retirement.

2 Year Articles:


Retirement – 1 Year

The true countdown begins.  It’s time to start positioning your investment portfolio for withdrawals. Review your asset allocation, and build a cash buffer to avoid Sequence Of Return risk.  Consider a Bucket Strategy as you finalize your withdrawal strategy, and determine how you’ll fund every year of your retirement income.  Finalize your plans for post-retirement health insurance, and get any pending medical issues dealt with while still on your employer’s insurance plan.

Get A Countdown App – it’s fun to countdown the days

1 Year Checklist:

  • Put a Countdown App on your phone and track your progress.  (Mine had ~900+ days when I started the countdown, and now has less than 80!)
  • If you’ll be moving/downsizing in retirement, determine when you’ll sell your primary residence.
  • Begin building a Bucket List of things you’d like to do in retirement.
  • Ensure all estate planning documents are updated to reflect your retirement life, location, etc.
  • Fine-tune 401(k) and IRA to maximize your contributions in your final calendar year of work.
  • Develop a Retirement Withdrawal Strategy
  • Determine your Social Security claiming strategy.
  • Consider establishing a Retirement Paycheck via a Bucket System.
  • Consider pre-loading a CD or Bond ladder to mature in the coming years.
  • If you haven’t already, start an exercise program to allow you to enjoy your retirement years.
  • Start building social networks outside of work.
  • Determine if Before-Tax IRA/401(k) rollovers make sense before RMD’s at Age 70 1/2.

1 Year Articles:


Retirement – 6 Months

You’re rapidly approaching The Starting Line, congratulations!  It’s time to celebrate. You’ve been working on your plan for several years, now it’s time to pull the trigger and execute.  One tip I received from a friend who recently retired was to consider making any required “major” purchases (e.g., your retirement car) now, while you’re still drawing a paycheck.  Make sure you’ve budgeted the spending in your cash flow plan, and don’t overspend.  Once you’ve retired, it becomes harder, psychologically, to spend the money.  So, if you really need a few items to set yourself for your retirement lifestyle, consider buying them now.  In our case, we sold my “commuter car”, bought a pickup truck and RV, and remodeled our kitchen.  All were planned in our budget, and all occurred in the final 6 months of my working career.

The 5th wheel we budgeted for, and bought 6 months before retirement

Ramp up your “outside work” activities, and spend some serious time thinking about what you want your Purpose to be post-retirement.  Get engaged with groups/charities/friends in your retirement location, and put together plans for your first 6 months of retirement.  We’ve booked 4 camping trips and a cross-country train ticket on Amtrack, all for the first 4 months of our retirement.  Focus more of your time on “non-work” related areas, and begin to “let go” of your work mentality.

6 Month Checklist:

  • Decide when/how you’ll notify your employer of your retirement date
  • Finalize departure requirements with your employer, and make sure all employment records are in order.
  • Establish a personal e-mail, and begin moving subscriptions and online accounts to the new address.
  • Begin copying information from your work to personal computer, respecting employer policies.
  • Consider getting a HELOC on any property which has substantial equity. It’s easier to obtain while you are still employed.
  • Begin focusing on your life “outside” of work in preparation for full-time retirement living.
  • Consider buying your retirement toys/cars/hobby items now, while you still have a steady paycheck.
  • Finalize all required medical and dental work.  Get those new glasses.
  • Finalize post-retirement insurance coverage.

6 Month Articles:


Bonus Section:  How To Tell Your Boss

Ironically, as I was concluding the draft of this post, I got an email from a friend of mine at GOBankingRates, requesting a quote from me on “How To Tell Your Boss” for a story she’s writing.  Since the timing lined up perfectly with this post, I’ve decided to paste the content of my e-mailed response as a Bonus Section to this Ultimate Pre-Retirement Checklist:


Conclusion

Retirement is one of the biggest changes we face in our lives.  Be intentional in your planning, and use this checklist to ensure you don’t miss any of the steps required to Achieve A Great Retirement.

I’d like to build on this checklist and hereby request that you add suggestions in the comments.  I’ll add new items to the post above as your comments come in.  Together, let’s build the Ultimate Pre-Retirement Checklist!

I hope this checklist is helpful for you and look forward to chatting with you in the comments, as always.


PS: I’d like to give a special shout-out to Skip, a regular reader of this blog, for inspiring this post.  In my recent post 100 Days To Freedom, he left the following comment, which led to the creation of this post.  I’ve weaved in items from his suggested Mr. Money Mustache thread in the checklist above.


Infographic

Following the publication of this post, I created the following Infographic summary of the Ultimate Pre-Retirement Checklist:

 

47 comments

  1. This is a great list Fritz! Fits right into my current timeline of 5 years, so I’ll have to add it to my list of references. Have you considered taking up painting? That lazy river to the mountain lodge is quite a masterpiece! I need to come up with a similar version for inspiration. That last stretch must take a lot of patience!

    1. Hey Max, glad to hear the post will help on your journey, that’s why I write! I most certainly could NOT be a painter, my wife is the artist in the family!! She surprised me one day with “The Lazy River” when I got home from work, we’ve enjoyed checking off each month over the past two years. Patience is getting easier as the timeline is getting shorter!

  2. Nicely done! Most exciting for me was seeing that sweet RV. My 3 year old and I went looking last weekend and there are some really nice ones out there. As for bosses, I have left one job so far in my career and did what you recommend up there. One to One meeting. Timeline of 5 months given. Tried to finish my call duties to the extent possible. It worked out and I think if I wanted to go back I could.

  3. Fritz,
    Excellent article – one of your best yet !
    Great how you were able to weave in your previous articles that related to each of the checklist stages.
    Any of your readers planning to retire will benefit from reading this article ( including me !)
    Thank you for putting together a step-by-step guide for your readers that are planning to retire.
    Skip

  4. Love the part about Purpose. I think so many people focus too much in the numbers and the math and just think that the why part will happen. It is extremely important to focus on what you are going to do in retirement and even start doing it before you retire. Like I’ve always heard, “Retire to something, not from something”.

    I do hope that cross country train comes out to Southern California. Would be great to see you!

    1. Mrs. WOW – you’re early this week! I agree that most folks spend too much time on the numbers, and not enough on the stuff that really matters (like cross country train trips! On that, I’ve heard the stops are very short, so while we’ll be passing through LA, I don’t think we’ll have time to stop off and visit. Our loss….).

      1. Usually I don’t have any time on Tuesday mornings to read, but I managed to sneak in your post. Good thing too since it was a good one. Too bad on the train, guess we’ll have to make it out to you one of these days. Would love to check out your neck of the woods!

  5. Your entire blog is a roadmap! What you’ve done to help yourself is really going to be able to help so many other people. Nice.

    On the topic of Purpose and activities post-retirement — I found it was nice to have a wish list to add to. You think you’ll have time for all of it, but you won’t. Somehow when you are so busy working, it feels like there will be endless time available once you’ve quit. Time is still very short. But that list is nice to look back at now and then, from the “other” side.

  6. Lots of gems here anyone planning to retire should take a look at.

    Getting the HELOC is one of the best tips. It can be a huge insurance/peace of mind policy before those pay checks cease.

    That’s some luxury RV! I had no idea you went that upscale. Life is good!

    1. Life is good, indeed! Yep, we decided since we’ve “Lived Like No One Else” for the past 30 years, it’s time to “Live Like No One Else”. Credit to Dave Ramsey….

      Kinda like some friends I know who are building a Groovy Ranch, retirement is the time to live your dreams!

  7. Nice list. A couple things I’d like to add, though.
    1. Mini retirement should be longer. If you can swing it, go for 3 to 6 months. 2 weeks is way too short. I took a 2 month paternity leave and a 3 month unpaid leave before I quit my job. You really need to see if you can handle the unstructured lifestyle.
    2. life insurance. Life insurance was one of the benefit at my old job. I had to find a policy when I left. This is more important if you have young kids, of course.

    That’s an RV? It looks huge. Nice. 🙂

    1. Great adds, Joe. We actually did purchase a Life Insurance policy several years ago (20 year term), will go up and add to the Checklist now. I also like the idea of a longer mini-retirement, but it’s pretty tough to swing for those still working full time. You were fortunate to have the paternity leave option.

      Note to everyone: Did you see what Joe did there?? He RETIRED when his child was born!! Now THAT’S an early retirement! Congrats, Joe, I love your blog, btw!

  8. I can’t believe you wrote this just for me! Ok, I know you didn’t but I appreciate it anyway!

    A lot of us in the community (I’m guilty) tend to focus more on the earning/saving side of retirement and not as much on the retirement prep side. This is really helpful.

    My situation is a little different (whose isn’t?!) and when we move out of the country, it’s going to be a lot of change all at once. Adjusting to leaving the job, moving, and better yet – moving out of the country. Our daughter will be leaving her school and starting at a new one (or homeschooling).

    So much for us trying a mini-retirement first, huh? Our lives are going to be in complete shock for a year or so adjusting.

    Thank you!

    — Jim

    1. Of course I wrote it just for you, Jim. I figured since I’d put in the effort, I’d share “your” article with others. Hope you don’t mind…..

      Panama awaits. I’m looking forward to watching your journey through your words. Happy that (at least part of) the article I wrote for you is helpful.

  9. How do you address the issue of health insurance coverage from ages 55 – 62. I have done a lot of research and haven’t figured it out yet. ACA won’t cut it.

    1. That’s a tough nut, Natalie. We’ve decided to go with COBRA for 18 months, then we’ll revisit ACA vs. Health Sharing Ministries starting in 2020. We’re budgeting $24k/year for health insurance, but I suspect we’ll find that insufficient given the inflation trends.

      MAJOR issue for early retirees, no doubt. Make sure you build a conservative estimate into your retirement cash flow plan, and don’t retire until you have enough money to cover the expense.

      1. Thanks for sharing your strategy on this one. The future of healthcare, both delivery and cost, is so uncertain right now I’m having a hard time even projecting cost into my model. In my state, Iowa, we only have one provider in the ACA marketplace so that’s really concerning. Perhaps I need to relocate to a state with better ACA options in order to retire early.

  10. Great post! So much good info here. Thanks for sharing so much detail and the resources. We are at the 2 year stage and it’s good to know we’re doing what we need to be doing to prepare for our FI day. Congrats to you and Jackie. I can’t wait to hear about your upcoming journeys!

  11. We did so many of the same steps. I went back and read some of the link articles and knowing that you are finalizing your retirement budget I am curious how what you see as your budget compares to the one you did five years ago. I had a friend criticized the bucket mentality, that what’s the point of segregation? How do you feel about building in lifestyle inflation ? Sincerely, Lara

    1. Hey Lara, good question. We still feel our budget estimates were pretty accurate, tho we won’t really know until we retire. On the inflation front, we put in separate rows in our retirement cash flow model for different spending categories, and inflated them at different rates (e.g., healthcare inflation > housing).

      The bucket mentality really is just a mental game, the bigger picture is the overall asset allocation. The bucket approach just helps you realize why you’re keeping the targeted allocation of low risk/low return assets to avoid Sequence Of Return risk. Some folks do criticize it, and say the overall asset allocation should be the focus. I disagree, and say the end game is the same, it’s just a question of how you look at it.

  12. We did similar steps in determining our budget starting at five year out, but after 401k contribution we were using most of our excess discretionary funds for tuition payments to keep student loans to the minimum and pared down to frugal vacations for this whole period. So January paid the last tuition bills for college and law school and March DH started retirement two weeks before age 55. Pension covered living expenses and waited till next January to start a 72t disbursement from a portion of our Traditional IRAs segregated from the rest for discretionary spending on dreams,hobbies, and travel.
    So I am curious, how does your finalized budget for retirement compared to your budget of five years ago? What are you planing as your inflation rate. Mine has always been less then 2 % but planned on 3%. I am toying with the idea of dropping the bucket philosophy and stop tracking my expenses. After twenty years of early retirement I am like Mr Money Mustache, I find even changing to mainly organic, spoiling the grandchildren, pursuing painting and photography, genealogy, travel, my expenses are in a tight .05 % percentage change proportional to my total assets, that doesn’t change much. My FUN bucket seems to earn more then my dreams cost and my kids keep telling me they are fine with no inheritance. So why do all the work of filling in the budget categories? When is it time to sit back content. Sincerely Lara

  13. Great, but how about helping post-retirement. I know you are not there yet, but I look forward to your blog posts for the period in early transition to the retirement life (as I am in now). It’s fine to plan the trip, but sometimes it helps to note the course corrections that are necessary when planning turns into reality.

    1. Hey, Marty J, I ‘ve been Early retired for twenty years and now 65. Left corporate America to take care of aging sick parents about five hundred miles away. DH decided to continue about ten years so the kids didn’t have to be burden with a lot of debt and we practiced extreme frugality to make it happen. We dId continue contributing the percentage to 401k that the company match and the employee contribution pension plan. He took a golden handshake two months after we finish with their tuition just shy of 55. Fritz has really thought a lot of the pitfalls through in his articles. Retirement is good until it isn’t just like other stages in your life. I can say all the plans in the world go out the window when one of the couple gets diagnosed with their end disease. It’s even harder when this hits very soon after both of you retired. My suggestions would include maintain some friendships that are yours alone- sadly couples friends have a tendency to pull away. Run your numbers when one of you are a widow. Sincere, Lara

  14. For those on a very early retirement schedule, (perhaps also have kids) one thing to think hard about is how you will prepare for and handle the question “What do you do for work?”.

    I can tell you that we have had some very interesting conversations already when telling folks of our move to NH, even as far as shutting down conversations. It’s a tricky one to navigate, it really is. I think I recall Mr. FIREStation had a post a long time ago on this very topic. Must go dig it out and read it again.

    1. Mr. PIE, your comment brings to mind the discussion we had on our recent call. It’s an interesting topic that’s seldom discussed in the early retirement community. The response I’m planning: “I’m A Writer”. Works for me, and I can’t wait to use it for the first time!

    1. Thanks, John. My wife and I have spent the past 4 years touring the annual RV shows, determining exactly what we wanted for our “retirement rig”. We settled on Grand Design as the manufacturer, and chose the Reflection as the model. We picked it up at Northgate RV Center in Ringgold, GA and wouldn’t hesitate to recommend them as an RV dealer.

  15. Although we’ve made sure essentials and emergencies are well-covered, Jo and I didn’t try to develop finely detailed spending plans. She’s always been frugal and I know how to flex consumption up or down as markets alter our nest egg. But we did budget for two splurge expenses: high quality and very safe woodworking tools; and first class airline tickets for our four long trips each year.

    Having one or two luxury expenses was always important for us. Frugality 90% of the time was bearable if we could live as royalty for short periods. We could probably now afford a 50-50 luxury/frugality split. I think we still get thrilled when finding bargains.

    1. Great approach, John. You’ve earned it, and it’s time to live the life you’ve dreamed. Those four long trips per year sound like a great plan in retirement! Good point on how allowing yourself a few small luxuries in life is a nice balance with an overall frugal approach. Thanks for contributing to the discussion.

  16. Good Morning Fritz, I am new to your blog, caught wind of it on MSN. Congratulations on the notoriety! I have enjoyed reading your material and the connections to other like minded individuals. Thought i would add my 2 cents to the conversation. A friend of mine, Scott Peterson, at Peterson Wealth Advisors uses what he calls the Perennial Income Model for retirement income maximization. It is like you bucket model but with a few twists. He has even written a book about it that he gives away free for the asking on his website, . Thanks for sharing your story, love to hear and learn from those who are ahead of me on the path.

  17. A few to add:
    1. Follow theretirementmanifesto.com religiously
    2. Reconcile whether you’re escaping a bad situation or moving in a better one (or both)
    3. Enjoy the ride!

    Great list here, Fritz – Another classic, evergreen contribution to the canon!

  18. Fritz,

    For your next update you might add a few bullet points for folks who plan on, or need to need to work after retirement. For them, their final work evaluation will be important. Obtain letters of recommendation from work associates. Update ones resume.
    Your infographics are great but difficult to print. I’m old school and like to print things out. Have a tip on how to print them?

  19. Great list to follow. We are 10 years out, but I am already thinking about the 5 year plan. At 5 years, I am considering really loading up on CD’s and/or tax-free bond funds to have a big bucket of dry power to cover the first few years of spending. We will be drawing down our taxable accounts for a good number of years before we have to take RMDs.

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