Pre-Retirement Checklist

Pre-Retirement Checklist

New research from Charles Schwab shows that three in five Americans live paycheck to paycheck and that only one in four have a written financial plan, but those who do exhibit positive investing and saving behavior.

You work with checklists all the time. Our retirement checklist is intended as a general guideline for leading up to your planned retirement. This tool can help you stay on track and assist you in improving your overall financial situation over time.

Americans with a Good Financial Plan are More Likely to Have Good Money Habits

Early on—15 + Years Out:

  • Create a budget to track your inflows and outflows to identify how much free cash flow can go towards goals.
  • Build up an emergency fund of 6-9 months of living expenses to prepare for unexpected and urgent expenses.
  • Ensure you are capturing your full employer matching contributions in your retirement plan and increase contributions at least 2% per year from there.
  • Consider making some Roth 401k contributions earlier on to maximize the tax free growth.

5-10 Years Out:

  • Start familiarizing yourself with Social Security retirement benefits and defined benefit/PBGC benefits.
  • Plan on paying off your outstanding liabilities prior to retirement and prioritize the highest interest rate debts first.
  • Consider different avenues to cover potential long-term care expenses such as long-term care insurance, self-insuring and hybrid life insurance policies.
  • Consider relocating prior to retirement if this is a goal for you so you can adjust to cost of living changes as well as go through the mortgage approval process while you still have working income.
  • Weigh pros and cons of using any extra cash flow to invest in a taxable brokerage account vs. pay off your mortgage faster.

3 Years Out:

  • Identify & quantify your spending goals in retirement like basic standard of living expenses, annual travel, etc.
  • Obtain updated Social Security estimates for different ages and map out an initial filing strategy.
  • Develop a list of all resources that will support your retirement goals (SS, defined benefit/PBGC, current and former employer plans, IRAs, etc.) to get a big picture view.

<1 Year Out:

  • Start researching Medicare, Medigap and Medicare Advantage plans to begin deciding what’s best for your personal situation. Look into any options to continue workplace healthcare coverage if retiring prior to 65.
  • Review existing insurance needs and current coverage to evaluate what you may no longer need.
  • Review/request the internal MEC retirement checklist specific to your airline. This will detail internal procedures and timelines associated with the retirement process as well as provide additional guidance and benefits information.
  • Plan to enroll in Medicare three months before you turn 65 and apply for Social Security retirement benefits 3-4 months before you want your benefits to start.

If you would like more detail on each of these bullet points, please call our office for a more elaborate version of this content.

“If you fail to plan, you are planning to fail.”

– Benjamin Franklin

Total Investment Management, Inc. offers this commentary strictly to educate, inform and share our thoughts on the markets. Nothing here should be construed as investment advice. Past performance is no guarantee of future results.

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