5 Steps to Take Before You're 65

5 Steps to Take Before You're 65

June 26, 2018
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Even if you’re not sure whether you’re going to retire at the age of 65, it’s still a good deadline to set to have your retirement plans in place, for when the time comes.

That may require some careful calculations – and some help from your financial professionals—to lay the groundwork for your retirement.

Here are some steps I recommend to get you on the right path:

1. Before you retire, consult with your human resources office to find out the extent of benefits your employer may offer, such as extended health insurance. Make sure you understand the rules around your company retirement plan, find out if the company offers an extended health insurance plan, and see if there is any special compensation owed to you for unused vacation days, sick days or other sources.

2. Meet with your tax accountant to find out how retirement will affect your tax strategy, and to discuss tax-efficient ways to take withdrawals from your retirement plan.

3. Make a decision on Social Security. Even before you hit age 62, you need to start thinking about Social Security. You can begin taking Social Security as early as 62, but there are repercussions that permanently reduce your payments. It may be best to wait until age 66 or even later, depending on your financial situation. But it’s a decision you will want to make well before you’re 65.

4. Figure out your health insurance situation. You’ll need to register for Medicare when you turn 65, but you will also need a supplemental policy to fill the gaps in coverage. You need to figure out how you’re going to fill that gap before you turn 65.

5. Meet with you investment advisor or financial consultant. You may want to do this sooner rather than later. You have a lot of planning and paperwork ahead of you. An experienced financial advisor will have the expertise to advise you on how to organize your retirement planning process and guide you on these important matters:

  • Determine if you can afford to retire, or If you should continue to work in some capacity to bolster your savings and income.
  • Calculate a rough estimate of the income that will be available to you in retirement, including investments, Social Security, pensions, and any other income.
  • Determine a monthly budget that will allow you to live comfortably yet preserve enough of your assets to see you and your spouse through retirement.

Retirement may be time of leisure and relaxing afternoons, but getting there requires some careful and detailed retirement planning.