Countdown to Retirement

A timeline you should follow


4 to 5 years from retirement

This is the point when many people start building the knowledge for a successful retirement. You should begin pulling all the pieces of information together to support the many decisions you will be making along the way. This is important to help take the fear and unknown out of the retirement decision. Start a file and keep it at hand. Start discussions with your spouse to find out what each of you expect during retirement.

Prepare a document locator to record the following: policy numbers and phone numbers for all your insurance carriers, account numbers and contact information for your investment and savings accounts, location of will, trust and other important information. Inform your spouse or beneficiaries where the document locator is kept.

  • Pick one or two tentative retirement dates. These can be changed later if conditions warrant, but at least this will give you a timeframe from which you can begin the planning process.
  • Meet with a retirement specialist. A financial plan should be drafted early in your relationship. The plan should incorporate all of your assets, future income needs, and a schedule for reducing your debts before retiring.
  • Check your potential eligibilities your chosen retirement date. Will you be eligible for Medicare, social security, or pension benefits? Will there be any gaps in coverage, such as health insurance or monthly income?
  • With your family, think through your desired post-retirement lifestyle and income needs. Are there potential major events or other circumstances that could impact your retirement plans? Will retirement include relocation, change of housing, or major purchases?
  • If relocating to a different part of the country is a possibility, start to do research on those areas. Consider the weather, others who will make the move with you and new state taxes. You should also make an extended stay in the area to make sure you really like it before you commit to the move.

Several items become timely considerations at this point in life:

  1. Consider obtaining long-term care insurance to cover any potential costly health issues.
  2. Maximize all available tax deferred contributions.
  3. Begin to work on legal documents needed for financial and health issues like a will, trusts and power of attorneys, etc.
  4. Secure a liability umbrella policy to protect the retirement assets you worked so hard and for so long to accumulate.

3 years from retirement

  • Create a retirement budged based on different assumptions. Start with current expenses and then anticipate how those costs will change once you retire.
  • Work on a game plan to start paying down debt. Retire any high interest credit card debt and start paying off any loans on your 401k or 403b. You also might want to retire your mortgage, even if your tax-deductible monthly payment doesn’t bust your budget. If your mortgage is already paid off, consider using the money saved to increase your contribution to a retirement savings plan (401k, 403b, IRA).
  • Track down pensions from current and former employers. Obtain a copy of the summary plan description detailing how you can elect to receive your benefits.

1 year from retirement

  • Firm up your expected retirement date and review your budget. Make sure to update your future retirement budget accordingly.
  • Use up your benefits. Use your employer sponsored medical insurance while you still have it. Medicare doesn’t cover everything, particularly dental and vision, so get procedures done while you’re still covered.
  • Don’t forget to take all the vacation and personal days you’ve accumulated. Take the time off or receive cash if the option is available.
  • Explore post-retirement medical benefits and life insurance options. Medical coverage and its cost can change significantly upon retiring.
  • Investigate whether your company provides health benefits for retirees. Some companies allow you to pay a monthly premium to stay on their group policy. By law you’re allowed to remain on your employers’ medical plan for 18 months after you retire. However you will have to pay the full cost of the coverage. If there is a gap after the 18 months and before you become eligible for Medicare, you may have to consider adjusting your retirement date in order to eliminate any gap in medical coverage.

6 months from retirement

  • Set the optimal retirement date. By waiting until the end of the year, or your employment anniversary month, you could add a full year of service for the purpose of calculating your pension. Plans vary, so you will need to contact the retirement plan administrator for clarification.
  • If you have not already done so, meet with a retirement specialist. A financial plan should be drafted and incorporate all of your assets and future income needs. Make sure your financial advisor fully understands you retirement goals and how your assets will be used to achieve those goals.
  • Change any investments you may have that are high risk to a lower risk investment.
  • Discuss your final retirement goals and expectations with your entire family.
  • Discuss with your spouse their expectations of you being home full time.
  • Start to formulate a list of activities or hobbies you would like to do after retirement.
  • Research getting involved with local clubs or taking a class that you’re interested in.
  • Plan a Retirement celebration trip like a cruise or trip to Europe.

FINAL CHECKLIST: 3 months from retirement

  • Visit with the Human Resource department to find out exactly what is needed to retire. Request all the necessary paperwork and inquire about any deadlines or timelines for filing out your forms.
  • Meet with your financial advisor to discuss income needs and investment strategies for your retirement assets. Also review the company plan retirement options with your advisor. If you opt for the lump sum distribution of your company’s retirement plan, arrange to have your employer roll it directly into an IRA. This can avoid having 20% of those funds withheld for taxes.
  • If you will be moving to another state, have an attorney from that state review your will and other legal documents to make sure they continue to be valid.
  • If you are eligible and desire to take social security at this time, apply on-line at: