Retirement Planning Checklist

Ethos' retirement planning checklist guides you through preparation for this exciting chapter, so you can feel confident — and as fully prepared as possible — entering the Golden Years of life. 

1. Know your net worth

The first step on your retirement checklist should be taking an honest assessment of the state of your finances. Knowing your net worth is a critical first step and easy to determine. Your net worth is simply a calculation of what you own minus what you owe.\ \ First, add up all your assets, including cash, savings, retirement accounts, real estate holdings, investments, and vehicles. Then figure out what you owe, including a mortgage, loan payments, student loans, and credit card debt.

If, after calculations, your net worth picture doesn't exactly reflect the financial shape you'd like to be in when you retire, it's the perfect time to establish some new goals —such as paying off all credit cards or other debt within a specific timeframe.

2. Review social security benefits

Your 35 highest-earning years determine your typical social security benefit amount. You can begin receiving a social security benefit at age 62, although it's reduced significantly. When you turn 66, you're eligible to receive 100% of your social security benefit. 

If you wait until age 67 to draw social security benefits, then you'll receive an 8% increase. If you wait until age 70, you'll be eligible for a 32% increase above your original benefit. Your social security benefit could be a significant portion of your monthly income, so understanding this number is a crucial financial factor. 

3. Be realistic about your retirement lifestyle

As you evaluate your current financial state and prepare for your future one, ask yourself what kind of lifestyle you want for your retirement. This includes the daily activities you want to participate in, such as exercising, traveling, or volunteering, and it also means choosing where you want to live.

Your lifestyle could include moving to a new area of the country to fulfill a lifelong dream or being closer to your family. Whether you're planning to travel or pay for a move, narrowing in on the lifestyle you want is a crucial step in planning ways to save for retirement.

4. Set a monthly budget

Creating a monthly budget for retirement is another key step on the retirement checklist. Here, you'll list out your expected expenses, ranging from healthcare and housing to groceries and gas. It's essential to have a realistic view of how much money you have coming in and out as you're planning. 

Expenses fall into a few categories, including fixed and variable. Your fixed expenses are the ones you know won't likely fluctuate and are due at the same time each month. Examples of fixed expenses are housing and insurance premiums. Your variable expenses are harder to predict since they fluctuate in amounts and timing. But identifying both of these types of variables before you retire will set you up for retirement planning success.

5. Factor in healthcare

When you're preparing your retirement planning checklist, it also needs to include healthcare. This involves two phases. The first phase falls under the "What do I need to do before I retire" timeframe and involves getting up-to-date on all your health checkups, including dental and vision. Take advantage of every benefit of your company's health insurance plan while you can, and focus on setting up as many years of good health as possible. 

Enrolling in Medicare is the second phase when you're factoring in healthcare. Your eligibility for Medicare starts at age 65. As you're planning for Medicare, keep in mind that it doesn't cover all costs, such as prescriptions. If you want additional coverage, you'll need to make plans in your budget for supplemental insurance. 

6. Work with a financial advisor

A financial advisor is a great resource, even if you've never worked with one prior to retirement. Not only can they answer questions regarding investments and budgeting, but they can also help you determine the best timeframe for withdrawals. A financial planner can guide you through withdrawing money from your 401(k), Roth and Traditional IRAs, and other investment options. 

7. Evaluate life insurance needs to complete your retirement planning checklist 

When your children are grown and you're approaching retirement age, it's a prime time to re-evaluate your life insurance needs. Most employers offer some amount of life insurance coverage, but you'll lose this benefit when you retire. There may be expenses you'd like to ensure are covered for your loved ones. 

After you establish your financial goals and determine what you want your life insurance policy to cover — all while keeping your retirement budget in mind — you can calculate how much coverage you need. 

Get a quote now for life insurance online with Ethos.

The information and content provided herein is for informational purposes only, and it is not to be considered legal, tax, investment, or financial advice, recommendation, or endorsement. You should consult with an attorney or other professional to determine what may be best for your individual needs.