Retirement and pre-retirement checklists abound on the internet. The same advice can be found on many of these lists, such as creating a realistic retirement budget and getting a handle on your Medicare options. We culled a list of 10 other things you should be thinking about as you make your pre-retirement plans.
1. Don’t procrastinate saving for retirement
If you have years to go before retirement, or aren’t planning to retire at all, you should still save whatever funds you can, now. If you don’t yet have a 401(k) or other retirement savings, experts advise opening an account as soon as possible, and setting up an automatic contribution from your paycheck, no matter how small.
“Even if you can only contribute 1% for now—that won’t get you to retirement, but it will get you closer than you are today,” says Katie Brewer, Certified Financial Planner with LearnVest Planning Services.
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2. Reduce your investment risk
If you do have savings and are close to retirement, start to transition high-risk investments into less volatile ones. Convert stocks to bonds and ETFs (Exchange-traded Fund).
“While none of us can predict how the market will perform, we do have the ability to secure assets from big losses,” writes Jeff Rose in U.S. News & World Report.
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3. Use your vacation time, or risk losing it
Unless your banked vacation time can be converted to cash when you retire, use your paid time off. Take the opportunity to look at potential retirement spots (see below), or research the activities you think will bring purpose to your post-retirement life.
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4. Evaluate retirement living situations
Start thinking about where you want to grow older. “You should at least narrow your options down to one geographical area and one type of living situation (a house you own, a rental, a retirement community, a family member’s home, a series of cruise ships, etc.),” writes Wendy Connick of The Motley Fool. “Making these decisions well in advance gives you the opportunity to do some research and make some visits to the place you’re considering. And if your dream destination turns out to be a big disappointment, you still have plenty of time to come up with a plan B.”
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5. Research tax implications for your retirement income
Depending on how many sources of income you have, including social security, your tax situation may change drastically post-retirement. One factor in choosing the place you retire might be how your income is taxed in that state.
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6. Look into long-term care insurance
On first glance it may not appear to be worth the expense. But in the event of catastrophic illness, long-term care insurance can be the buffer you need to age securely in place.
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7. Women: consider the unique challenges to your retirement planning
Increased divorce rates, time spent out of the workforce to be caregivers, and other factors leave women more financially vulnerable post-retirement.
Lorraine Mirabella writes, “About twice as many women over 50 are divorced today than 20 years ago. Women are outliving men, and do not remarry as frequently as men. Experts say women need to save a bigger chunk of their income for retirement than men because they get paid less and live longer, on average.”
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8. Think about who you want to be in your next chapter
What will bring meaning and purpose to your life? Will you be resilient as time moves forward and your personal circumstances change? “Keep all of your best attitudes and behaviors; jettison the rest,” writes George Schofield, Next Avenue contributor for Forbes.
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9. Talk with your spouse or partner about how you’ll spend your post-retirement time together and separately
Life after work means a lot of togetherness, something many couples aren’t prepared for. It’s not uncommon for petty resentments to surface as each of you carve out new routines and create space for yourself and your needs.
Ron Carson writes on CNBC, “Keep in mind that, just as you adjusted to the time away from your family while at work, you will adjust to being around your family on a full-time basis. Many people find this transition to be positive but still enjoy independent hobbies or clubs.”
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10. Prepare for the psychological impact of retirement
Loss of identity for someone who always defined themselves by their work can make post-retirement life difficult. Some retirees experience anxiety, depression, and other ill effects on their health.
“Research by psychologists and others has found that working or volunteering during retirement can help stave off depression, as well as dementia and hypertension,” writes Jamie Chamberlain for the American Psychological Association. But staying busy for the sake of being busy isn’t enough. To be beneficial, post-retirement activities should also keep you happy and engaged.
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