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Retirement is a huge step in life—one that we work most of our lives to reach. Planning for retirement and knowing how to ensure you’re ready for it are often difficult, but we have compiled a short pre-retirement checklist to help guide you through this exciting time!

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1.) Make a retirement budget and
income timeline.

 You need to have an accurate representation of the expenses you will be incurring to guarantee that you don’t outlive your money. You should combine your current assets with a timeline of your expected post-retirement income to understand your overall budget before retiring. You should also research your employer’s pension plan prior to retirement. If your employer has a traditional pension plan, you will need to see if you are covered by the plan and understand how it works. If you are self-employed, check out one of our previous blog posts where we highlight different self-employed retirement plan options and explain which plan may work best for you. It is also important to have a minimum of three months’ worth of living expenses saved in a checking account in case of delays in pensions or social security. In the case where something unexpected happens to your income, you need discretionary funds that you can rely on to cover monthly bills and expenses until the problem is resolved.

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2.) Evaluate the best time to start collecting social security.

The age at which you start to collect social security impacts the monthly amount you will get paid for the rest of your life. The longer you delay collecting these monthly checks, the more monthly income you will get. People often say that you should delay collecting social security for as long as you can, however, this is not always a viable option for some people. To better understand the optimal time for you to start collecting, you should use an online retirement calculator and talk to your advisor about your personal retirement finances.

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3.) Reassess your risk level for the
stock market.

The last thing that you want after working so hard to amass enough money to retire would be to lose a sizable portion of your holdings due to an investment strategy that doesn’t fit your needs. Ensure that you are not only comfortable with the level of risk you are taking, but that it also aligns with your retirement goals and needs.

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4.) Figure out where your healthcare coverage is coming from.

Before retiring, you should use all of the benefits that your current healthcare coverage provides. Annual physicals, dental exams, and eye exams are not covered with Medicare; therefore, you should get these done before you decide to retire. You should also determine what any dependents that are covered by your current plan will do once that coverage is no longer available. Once you reach 65 you become eligible for Medicare Part A and should enroll immediately even if you are still working. Research Medicare Part B and Medicare Part D to see if they offer coverage that you feel you should additionally purchase.

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5.) Learn how to take money out of your 401k.

You need to understand when and how to take money out of your 401k or roll it into an IRA account. This may represent a significant portion of your assets upon retirement, which means you should know how to access these while minimizing taxes and/or penalties associated with withdrawal. The best option is generally dependent on age. To understand the tax benefits and drawbacks of IRA withdrawals, check out our previous blog post on whether or not IRA accounts are truly tax-free.

It is important to get prudent advice and understand the best options for you. You should take the time to think about what you need going forward and how those around you can help. We have attached our online retirement calculator as alink that will show you how prepared you are for when your retirement comes. If you have any questions about your financial goals or how to best prepare for retirement, we encourage you to contact one of our advisors.

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retirement