If retirement is on your horizon for 2025, now is the time to prepare. A solid plan ensures you’re financially secure and ready for this exciting new chapter. Use this checklist to make sure you’re covering all your bases as you approach retirement.
1. Confirm Your Retirement Date
- Decide on your exact retirement date and ensure it aligns with your financial goals.
- Speak with your employer about your planned departure.
2. Review Your Retirement Savings
- Check your 401(k), IRA, Roth IRA, and other retirement accounts to confirm your balances.
- Evaluate whether your current savings can support your anticipated lifestyle.
- Contribute the maximum allowed to your retirement accounts in 2024 and 2025, including catch-up contributions if you’re 50 or older.
3. Create A Retirement Budget
- List expected expenses: housing, healthcare, food, travel, hobbies, and other essentials.
- Account for inflation, which could increase costs over time.
- Identify discretionary expenses you can adjust if needed.
4. Optimize Your Social Security Benefits
- Determine the optimal time to start claiming Social Security based on your financial needs and life expectancy.
- Create a plan to maximize benefits, especially if you’re married or divorced.
5. Manage Healthcare Plans
- Research Medicare options, including supplemental plans or Medicare Advantage.
- Review your current healthcare coverage and plan for any gaps until Medicare kicks in (if retiring before 65).
- Consider long-term care insurance to protect your assets in case of extended medical needs.
6. Pay Off Debt
- Eliminate high-interest debt, such as credit cards or personal loans.
- Consider paying off your mortgage or creating a plan to manage it in retirement.
- Avoid taking on new debt as you approach retirement.
7. Reevaluate Your Investments
- Adjust your portfolio to reflect a more conservative strategy, protecting your savings as you near retirement.
- Ensure your asset allocation aligns with your risk tolerance and income needs.
- Meet with a financial advisor to confirm your portfolio is retirement-ready.
8. Confirm Your Income Streams
- Calculate your expected monthly income from all sources:
- Social Security
- Pensions
- Retirement savings withdrawals
- Annuities
- Passive income (e.g., rental properties or investments)
- Ensure your income will cover your expenses and identify any gaps.
9. Plan Your Withdrawals
- Create a withdrawal strategy to make your savings last:
- Follow the 4% rule or another withdrawal method based on your needs.
- Plan for Required Minimum Distributions (RMDs) if you’ll turn 73 in 2025.
10. Update Your Estate Plan
- Review and update your will, trust, and beneficiary designations on retirement accounts and life insurance policies.
- Assign a durable power of attorney and healthcare proxy.
- Discuss your estate plan with family members to avoid confusion later.
11. Research Lifestyle Changes
- Decide if you’ll stay in your current home, downsize, or relocate.
- Plan for how you’ll spend your time—travel, hobbies, volunteering, or part-time work.
- Consider any large purchases or projects you’d like to complete before retiring.
12. Build An Emergency Fund
- Ensure you have at least 6-12 months’ worth of living expenses in an easily accessible account.
- This fund will help cover unexpected expenses without needing to dip into your investments.
13. Meet With A Financial Advisor
- Schedule a meeting with your financial advisor to:
- Review your retirement plan.
- Ensure your financial goals are realistic.
- Make any last-minute adjustments before you retire.
14. Double-Check Legal And Work-Related Details
- Confirm the status of your pension or any remaining work-related benefits.
- Verify health insurance, COBRA options, or employer-provided retirement plans.
- Check for unused vacation or sick leave that can be cashed out.
15. Test-Drive Your Retirement
- Practice living on your retirement budget for a few months to see how it feels.
- Use this time to adjust spending habits and identify any gaps in your planning.
Retirement Confidence Starts With Preparation
Taking the time to check off these steps will help you retire with confidence in 2025. Remember, planning isn’t just about finances—it’s about creating a fulfilling and worry-free lifestyle. By addressing these key areas, you’ll set yourself up for a smooth transition into retirement.
Ready to finalize your retirement plan? Connect with a financial advisor today to make sure you’re prepared for this exciting next phase of life!
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