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:
- When Can I Retire? (a 4-part series)
- 5 Steps To Take Within 5 Years Of Retirement
- The Best Retirement Calculators
- How To Know When You’re Financially Independent
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:
- How Much Will You Spend In Retirement?
- Can They Retire? A Real Case Study.
- Why We Are NOT Buying Long-Term Care Insurance
- Should You Take Social Security At Age 62 Or 70?
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:
- How To Move Your Retirement From Good To Great (A 4 Part Relocation Series)
- A 10 Day Retirement
- 5 Milestones To Determine “When Can I Retire?”
- Purpose, Motivation And Life Aspirations
- Will Retirement Be Depressing?
- How To Downsize In 24 Hours
- Before I Die
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.
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:
- 20 Steps To Take In The Year Before Retirement
- How To Build A Retirement Paycheck From Your Investments
- Our Retirement Investment Drawdown Strategy
- We Just Became 100% Debt Free!
- The One More Year Syndrome
- The New Tax Law Loophole That Benefits Retirees
- How To Sell A House In 7 Days, For More Than Asking Price.
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.
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:
- 20 Steps To Take In The Year Before Retirement
- 7 Strategies To Make Your Money Last Through Retirement
- The 10 Commandments Of Retirement
- 100 Days To Freedom
- I’m Scared Of A Crash, Where Should I Put My Money?
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:
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.
Following the publication of this post, I created the following Infographic summary of the Ultimate Pre-Retirement Checklist: