3 “Are You Ready to Retire?” Checklists

checklists

A generation or two ago, most folks retired just because they turned 65. Today’s retirement is a bit more complicated than that. Age is still an important factor, but your ability to connect your financial resources to your lifestyle goals is just as important. And that brings us to one of my favorite planning tools – Checklists!

As I have shared many times before – as a pilot, I rely on my checklists religiously. It just is not prudent to rely on your own memory when dealing with life and death operations. That applies to flying as well as financial planning. It is also important to be using the correct checklist that is up-to-date. Imagine thinking you were good because you were using a checklist, but then realizing that you had a checklist from the wrong airplane or one that was completely outdated!

When a Keen Wealth client tells me that he or she is thinking about retiring, we run through these three up-to-date and appropriate checklists to settle on a timeline that makes the most sense financially and emotionally.

1. The Financially Ready to Retire Checklist

The most common question we field from our clients is, “How much do I need to retire?” This checklist helps clients reframe that question and, instead, think about how much money they will need to live the life they want to live in retirement. Items we discuss include:

  • You have a budget. Many clients who are preparing to retire tell us they’ve never kept a budget before. Time to start! Although, I like to call it a “spending plan” – it sounds more proactive and less restrictive and, yes, sometimes semantics do matter! If you have any big plans for early in your retirement, like remodeling your home or a dream vacation, let us know so we can discuss front-loading your spending in the initial years over and above your longer-term annual withdrawal rate.
  • Your debts are paid. No, you don’t necessarily need to pay off a fixed-rate mortgage before you retire. But try to reduce or eliminate credit card balances and any other loans that are charging you interest.
  • Your age, retirement accounts, and Social Security plan are all in-sync. If you’re planning on retiring early, be sure that your retirement accounts won’t penalize you with early withdrawal penalties for which you’re not prepared. Also keep in mind that the earlier you take Social Security the smaller your payments will be. In most cases, we recommend clients delay taking Social Security to maximize the benefit, but there are some instances in which taking Social Security early makes sense.
  • You and your spouse have a health care plan. Medicare insures individuals, not families. If only the retiree is 65, the younger spouse will need to buy health care elsewhere. We’re always happy to put clients in touch with trustworthy health care professionals who can help sort through all the options.

2. The Emotionally Ready to Retire Checklist

We spend so much of our lives working that our jobs become a large part of our identities. Rediscovering who we are once we stop working can be a major retirement challenge. To prepare for this emotional transition, we tell our clients to:

  • Talk to your spouse ahead of time. Don’t wait until your last day of work to discuss how both of you feel about retirement. What do each of you imagine life will be like? What are the things you’re excited to do? What are you afraid of? What can each of you do to make this new phase of life as fulfilling as possible?
  • Make a list. What are the things you’re passionate about? Something you’ve always wished you knew more about? A skill you’d like to develop? A cause that’s important to you? An ambitious business idea that was too ambitious for your former employer?
  • Check that your estate plan is in order. It’s understandable that many people avoid this part of their retirement planning. But putting together a legacy that could impact your family and community for generations can have tremendous emotional benefits. The peace of mind that comes from knowing the people you care about are taken care of can empower you to worry a little less and enjoy your retirement more.

3. The New Calendar Checklist

Ideally, the financial piece of this conversation should make you feel free enough to create a new retirement schedule based on the emotional piece. Plan your days around the people and passions that get you out of bed in the morning. Some ideas:

  • Work at something you love. Take a part-time job at a company that interests you. Turn that crazy idea you couldn’t sell to your old boss into your own business. Consult. Teach. Volunteer.
  • Keep learning. Brush up your high school French by enrolling in an online course. Learn some basic web design so you can showcase your photography portfolio or create an online store for your crafts. Sign up for cooking classes and get some new meals in your weekly rotation.
  • Get better at having fun. What’s the best way to lower your handicap or perfect your backhand? Take lessons from a pro. The second best? Organize weekly games with friends and family.
  • Travel. Planning out a big vacation can be a fun project for couples to do to together. And while you’re looking forward to that dream trip, take a few weekend jaunts out of town. Stay at the new bed and breakfast you keep hearing about. Visit your grandkids. Go on the road with a favorite sports team and enjoy the local flavor in a different city.

Of course, this is just a sample of some of the broader items that are on our retirement checklists. Our comprehensive process covers everything from how your taxes will change in retirement to changes in residency you might be contemplating, as well as interactive tools that can help you get the best life possible with the money you have. If you’re thinking about retiring soon or are retired and want to revisit these issues, come in and talk to one of my fiduciary advisors and let’s start working through these essential items together.

Bill Keen: When a Keen Wealth client tells me that he or she is thinking about retiring, we run through these three up-to-date and appropriate checklists to settle on a timeline that makes the most sense financially and emotionally.

About Bill

Bill Keen is a CHARTERED RETIREMENT PLANNING COUNSELOR℠ and independent financial advisor with more than 25 years of industry experience. As the founder and CEO of Keen Wealth Advisors, a registered investment advisory firm, he specializes in providing personalized retirement planning designed to help people thrive before and during their retirement years. With a passion for educating others, Bill regularly blogs about retirement planning, hosts the podcast Keen on Retirement, and has contributed to U.S. News and World Report, Reuters, Wall Street Journal’s Market Watch, Yahoo Finance, and other publications. Based in Overland Park, Kansas, Bill and his team work with clients throughout the greater Kansas City area and across the nation. To learn more, connect with him on LinkedIn or visit www.keenwealthadvisors.com.

Keen Wealth Advisors is a Registered Investment Adviser. Nothing within this commentary constitutes investment advice, performance data or any recommendation that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person. Any mention of a particular security and related performance data is not a recommendation to buy or sell that security. Keen Wealth Advisors manages its clients’ accounts using a variety of investment techniques and strategies, which are not necessarily discussed here. Investments in securities involve the risk of loss. Past performance is no guarantee of future results.  

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