Retirement Checklist

It is important to have a plan for retirement. Here are some things to consider before retirement that will help you prepare.

Determine your vision of retirement: Do you just want to relax? Do you plan to travel the world? Do you want to spend time with your family? Will your days be spent on the golf course or with a fishing pole? When you understand your vision, it will help determine a realistic budget for retirement.

Create a realistic budget: Remember that you likely will not have the same income in retirement as you had while you were working. If you intend to have an active retirement, you may need more than when you were employed.

Determine health care costs: If you are younger than 65, you will have to provide your own health care insurance or remain on your employer’s plan or the plan of your spouse’s employer. Upon attaining age 65, you can enroll in Medicare. However, some medical expenses may not be covered by Medicare. You may, therefore, want to look for a Medigap insurance policy to cover those additional expenses.

Assess available resources: When are you able to draw your pension? Is your 401(k) fully vested? What will your Social Security benefit amount be? How much money do you have in your IRA?

Assess your asset allocation: Assuming you have saved enough for retirement, your money should probably be in more conservative investments than it was when you were years away from retirement. Meet with a financial planner to discuss your assets.

Protect yourself and your assets with long-term care insurance: Most of the costs associated with nursing home stays are not covered by Medicare. Without long-term care insurance, you may have to pay for nursing home expenses out of pocket until you spend down your assets to as little as $2,000. Long-term care insurance is designed to cover many of the expenses associated with nursing home care and to provide protection against having to drain your savings to receive the services you need.

Reduce debt: If possible, pay off your mortgage and any other debt to help ease your stress during retirement. Consider moving from your home and downsizing to a smaller space. Open a home equity line of credit to provide access to tax-deductible credit when and if you need it.

Coordinate with your spouse: Discuss your vision of a perfect retirement. Don’t wait until you have retired to find out your spouse wants to continue working or expected you to continue working.

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