Retirement readiness checklist

Retirement readiness checklist

Every day is getting a little closer to retirement age. Are you ready for the financial impact of leaving the workforce? Here is a checklist to help you think about the variables that affect your readiness for retirement:

Estimate your costs of living after retirement

 For many retirees, expenses are higher in their first active retirement years but may also arise later in life if you need expensive living assistance.

Add your assets

As you approach retirement, you will need to have a good handle on the assets available to fund your retirement. Consider the equity in your home and other property, investment accounts, retirement accounts, annuities, cash value insurance, and savings accounts. If you are a collector and are hoping to make money, now is the time to get an appraisal to determine the cost.

Think about liquidity

How will you access your savings in retirement? Will you need to sell securities or property? Do you have an annual salary that can be converted into a source of income? Do you have a lot of pre-tax dollars in your retirement accounts? You will need a plan to withdraw from your retirement savings in the most financially beneficial way.

Calculate your earnings from Social Security

The amount you will receive each month from Social Security depends on your work history and the age at which you determine to retire. To obtain the maximum amount of your monthly benefit, plan to claim your Social Security benefits ( 65 or later, up to 70). Enrolling at a young age will result in a permanent reduction in your monthly benefits.

Be mindful of your tax obligations

Taxes continue even when you stop working. Assuming you meet the income limit, The excellent news is that you will qualify for a lower marginal income tax rate as a retiree. State income taxes vary widely and may affect where you want to retire.

Don't forget about inflation

You can get benefits from Social Security benefits. Also, your other income may not be immune from higher consumer prices. Consider inflation when estimating your future living expenses.

Enroll in Medicare during the limited enrollment period

To avoid penalties, you must choose your Medicare benefits within a limited time on either side of age 65. Special rules apply to people who continue to work and are covered by their employer's health insurance plan. While enrolling in Medicare, you will also have the opportunity to choose an optional supplemental medical insurance plan. 

Consult the experts

Don't wait until to find out how you will pay your way into retirement. Talk to your accountant and financial advisor; you can choose a retirement strategy to help you make the most of the savings you've accumulated from working a lifetime.