Retirement may still be a few years away, but it’s not too early to begin getting ready. Having a plan in place means that you will feel more secure about your choices when you actually do reach retirement. Below are some retirement planning milestones that are important to consider.

10 Years before Retirement Date

  • Where will you live in retirement? Most retirees stay put, but many plan to move to warmer climates or to be near family. Now is the time to begin preliminary investigation into what makes sense for you. Consider:
    • Expenses of living in a particular area. Will your retirement income will realistically afford the move? Will the cost of living change so dramatically that you’ll be left with little for other activities? Will taxes be higher?
    • Access to medical care. Will there be good quality care available when you need it?
    • Likelihood of family moving away. Will your children move away or be transferred with a job?
    • Quality of living. Are there local activities that will support your interests?
  • What will you do in retirement? You may have a hobby or past-time that will fill your days. Many retirees plan to open a business or become a consultant. Others become volunteers in the community. Investigate what resources you’ll need to set aside to fulfill your goals.
  • Reduce debt. The biggest favor you can do for your retirement is to begin eliminating debt and paying down your mortgage.
  • Begin saving  more. Now it the time to increase your contributions to savings vehicles. You should be saving around 15% of your income for your future retirement.


5 Years before Retirement Date

  • Reduce the risk to your portfolio. You may be heavy on stock-based investments which should be reduced to lower the risk to your savings.
  • Determine what your retirement income will be. Consider all of your assets and determine how those can be most wisely drawn down during your retirement.
  • Find out what retiree benefits your employer may provide. Admittedly, retirement benefits are a dying entity in corporate America. Beyond a sponsored savings plan like a 401(k), few companies offer a pension or retiree medical benefits—or even reduced costs for the company’s own services. Ask now so that you can begin making plans for retirement.
  • Consider purchasing long-term care insurance. Because medical and related care costs are the number one expense of retirement years, it makes sense to invest in LTC. A few thousand dollars in premiums each year may mean saving many thousands of dollars in your retirement portfolio.
  • Start budgeting. The key to reducing retirement expenses is to become accustomed to living on less now.


2 Years before Retirement Date

  • Review Social Security statements. Because Social Security benefits paid are based on your highest 35 years of reported earnings, you’ll want to make sure earnings have been correctly reported.
  • Work with an advisor or planner to refine your retirement plan. This is the time to get specific about income sources and amounts, likely expenses, travel and large purchase desires, etc.


1 Year before Retirement Date

  • Determine when to apply for Social Security. The selection process is complex, and few financial professionals are adept at guiding retirees through the process. Yet, this is perhaps the largest income asset most retirees have. When you apply makes a difference in the amount of your benefit, and it may make sense for you to delay applying for a few years. (Note: When you are ready to receive SS benefits, apply at least 3 months prior to the date you want to receive your first check.)
  • Work with a retirement professional to determine how best to manage your assets.
  • If you are considering a move, spend an extended vacation in your chosen locale. Retirees often wish they’d spent more time in a city before relocating. Perhaps a better choice is to rent an apartment for a few months after retiring and before selling your residence.
  • If you are considering a move to a retirement community, talk with the property agent. Extensively tour the site. Spend time there meeting people and making friends.


3 Months before Retirement Date

  • Notify your employer of your planned retirement date. Review any policies your employer has for retirement.
  • Make arrangements to rollover any pension, 401(k) or other employer-sponsored plan savings dollars. A financial professional will be glad to help you rollover into a qualified Individual Retirement Account (IRA).