Five Key Steps to Prepare for Retirement

You've probably spent more time planning a two-week vacation than you have for your retirement, even though retirement could last 30 years or more. Planning can feel overwhelming, but these five steps will help you prepare for a successful transition.

Five key steps to prepare for retirement

1. Understand Your Employee Benefits

Before you set your retirement date, meet with a human resources representative. Ask specific questions about how your benefits are affected by the timing of your departure. In some cases, adjusting your retirement date by even a single day can entitle you to thousands of dollars in benefits, such as a quarterly retirement plan contribution, healthcare coverage, or vesting in stock options.

For example, a client of mine planned to retire but discovered that by working an additional six months, she would reach 25 years of service and become eligible for lifetime health benefits. This small change made a huge difference in her financial security.

2. Plan for Major Home Upgrades

If you intend to stay in your current home after you retire, it's a good idea to complete major renovations and maintenance projects beforehand. Tackling significant expenses like replacing your roof or windows, or upgrading your heating and air conditioning system, can be much easier while you are still earning a regular income. You'll also avoid the stress of unexpected maintenance costs and cost overruns during retirement.

3. Consider How You'll Spend Your Time

The first six to twelve months of retirement are a significant psychological adjustment. The sudden change from a structured workweek to unstructured days can be jarring. One CEO I worked with described his feeling of going from "who's who to who's he" overnight. By thinking about how you'll fill your days and pursuing new hobbies or volunteer opportunities, you can make this transition much smoother and more fulfilling.

4. Pay Down Your Debt

Focus on eliminating as much debt as possible before you retire. Carrying less debt means you'll have more financial flexibility, and a greater portion of your retirement income will be available for the things you enjoy. You'll be able to spend more on experiences and hobbies, rather than on debt payments.

5. Work with a Financial Planner

A retirement analysis is a crucial tool for anyone nearing retirement. This analysis provides a clear picture of your financial standing and helps you understand whether you're on track to meet your retirement goals.

I once worked with a woman who was close to retiring without ever having a proper analysis done. When I ran the numbers, the results were troubling. We discovered that by delaying her retirement by one year, consolidating her debt, and reducing some expenses, we could significantly improve her long-term financial security. Having an accurate analysis is the first step toward building a solid plan.

Whether you're 10 years or 10 months from retirement, getting a professional retirement analysis can provide invaluable clarity and confidence.

Interested in having a retirement analysis. Visit the Let’s Connect section of our website and fill out the Contact us form at the bottom of the page.

Disclaimer

Investment advice offered through Stratos Wealth Advisors, LLC, a registered investment advisor. Stratos Wealth Advisors and Synergy Wealth Management are separate entities.