Written by Aiden Cox
Planning for retirement is one of the most important financial steps you’ll take in life. Whether you’re dreaming of traveling the world or enjoying more time at home, a smooth retirement starts with thoughtful planning. Here’s an actionable timeline to help guide your journey from working life to retirement bliss.
3–5 Years Before Retirement: Laying the Groundwork
1. Clarify Your Retirement Vision
What does retirement look like to you? Defining your retirement goals will shape your financial and lifestyle decisions, whether it’s part-time consulting, full-time leisure, or something in between.
2. Assess Your Financial Picture
Calculate your net worth, analyze your spending habits, and project your retirement expenses. Use online retirement calculators to estimate how much you’ll need.
3. Boost Retirement Savings
Max out contributions to your 401(k), IRA, or other retirement accounts. If you’re 50 or older, take advantage of catch-up contributions.
4. Review Your Investments
Shift gradually toward a more conservative portfolio, but ensure it still provides enough growth to support your retirement years.
5. Evaluate Health Insurance Options
Look into coverage options between retirement and Medicare eligibility (usually age 65). Consider COBRA, the ACA marketplace, or a spouse’s plan.
2 Years Before Retirement: Fine-Tuning Your Plan
1. Create a Detailed Retirement Budget
Outline monthly expenses, including housing, travel, healthcare, and entertainment. Compare this to your expected income streams like Social Security, pensions, and withdrawals.
2. Pay Off Debt
If possible, work toward eliminating high-interest debt, such as credit cards, car loans, or even your mortgage.
3. Estimate Social Security Benefits
Check your earnings record at SSA.gov and decide when to start taking benefits. Delaying increases your monthly payout.
4. Explore Part-Time Work or Hobbies
Consider whether you’ll want to work part-time, volunteer, or take up new hobbies. Planning now can ease the emotional transition.
1 Year Before Retirement: Prepare for Launch
1. Set a Firm Retirement Date
Work with your HR department and confirm your retirement date. Make sure you understand the process and required paperwork.
2. Review Pension and 401(k) Distribution Options
Understand your payout choices, whether it’s a lump sum, annuity, or regular withdrawals.
3. Secure Healthcare Coverage
Finalize your insurance plans. If you’re eligible for Medicare, enroll during your initial enrollment period to avoid penalties.
4. Consider a Test Run
Try living on your projected retirement income for a few months. Adjust your budget and expectations accordingly.
6 Months Before Retirement: Final Touches
1. Finalize Income Strategy
Determine the sequence of withdrawals from accounts for tax efficiency. Consult with a financial advisor if needed.
2. Double-Check Legal Documents
Review or update your will, power of attorney, and healthcare directives.
3. Notify Your Employer
Submit your formal retirement notice. Work with HR on benefits, last paychecks, and possible exit interviews.
4. Celebrate and Plan Your First Year
Think about what you want to do in your first year of retirement. Travel? Learn a new skill? Spend time with grandkids? Start strong!
Ready to Retire?
With a clear retirement checklist and a step-by-step plan, you can make the transition confidently. Stay proactive, review your progress regularly, and don’t hesitate to seek professional advice. Retirement isn’t the end of the road—it’s a new beginning.
Need help creating your retirement plan? Contact Canter Wealth to speak with a financial advisor and build a custom retirement plan that aligns with your goals.
