Personal Finance

30 Important Things to Do Before You Retire

By Alaina Tweddale

There are plenty of must-do tasks in the year or two before retirement to make sure you’ve considered all the angles and created the most comprehensive of plans. Here's a roundup of the 30 most important must-do items that experts say any pre-retiree needs to do to get ready for the golden years.

1. Create a Post-Retirement Budget

How much you spend during retirement might differ dramatically from what you spend during your working years. That’s why pre-retirees need to create a post-retirement budget, according to Emily Guy Birken, personal finance expert and author of “Choose Your Retirement.”

“To do this, you will need to determine your retirement income, including how much you expect to withdraw from your investments and what you expect to receive from Social Security or a pension,” she said. “Going into retirement without a post-retirement budget is a good way to overspend in your early years,” she warns.

2. Test-Drive Your Post-Retirement Budget

Once you have one set set, you should try living on your post-retirement budget for the year leading up to retirement, said Birken. Doing so “will help you acclimate to the changes” and “psychologically transition to your post-career life,” she said.

3. Avoid Lifestyle Inflation

The years leading up to retirement are when your income will likely be at its highest. “Keep your budget the same in spite of salary raises,” said Pauline Paquin, owner and founder of personal finance blog Reach Financial Independence. “That will boost your retirement nest egg, and allow you to live on a fraction of your last income in retirement.”

4. Reduce Living Expenses

“Start streamlining your lifestyle now in preparation for retirement,” said Carla Dearing, founding CEO of online financial planning service SUM180. “Take a close look at your monthly expenses and identify those items you can do without. This gradual approach will let you significantly cut your monthly expenses without feeling the shock of adjustment.”

5. Check Your Savings Numbers

“Although this sounds like a no-brainer, it makes sense to double-, triple- and quadruple-check [your retirement numbers] before you abandon the safety net of a regular paycheck,” said Robert Steen, enterprise advice generation director for retirement at USAA. “We recommend having roughly 10 to 12 times your final salary saved up before you start your retirement.”

6. Identify Income Sources

Review and list guaranteed income sources, like Social Security, pensions and existing annuities, as well as income-generating investments such as IRAs, 401ks, taxable investment accounts and savings accounts.

“If you have any doubts about your ability to cover any of your retirement expenses, or legacy goals, get some expert help. A financial advisor can provide additional perspective, advice and solutions to help you reach your retirement goals,” said Steen.

7. Plan Your Second Act

Some retirees pursue a passion project, while others seek a little extra income on the side to make ends meet. Use that last year to “build the foundation for your post-retirement career,” suggested Dearing. Use this time “to build the skills, resources and professional network you'll need to earn additional income after you leave your current job.”

8. Coordinate Timing With Your Partner

“It is fun to think of retiring together and immediately embarking on your elaborate travel plans, but if you stagger your retirement, more of your retirement assets will stay invested,” said Dearing. “You'll also have the continued benefits from one of your employers; the medical coverage alone may have a significant impact.”

9. Boost Retirement Savings

It can be difficult for many people to max out their retirement accounts throughout their working lives, but during your last year, strive to sock away as much as possible,” said David Hryck, personal finance expert and partner with prominent New York City tax law firm Reed Smith. That last year is the final opportunity to make a final push to put away as much as possible, and pad your retirement savings account.

10. Take Advantage of Catch-Up Provisions

“The government encourages saving in the final years leading up to retirement by allowing catch-up contributions to retirement accounts,” said Daniel Zajac, partner with Simone Zajac Wealth Management Group. “For those 50 years of age and older, the IRS allows a pre-tax deferral of $24,000 into an employer-sponsored retirement plan."

IRA participants who meet income requirements can also contribute an extra $1,000 per year. “I’ve never heard a retiree complain that they saved too much for retirement,” Zajac added.

11. Consolidate Financial Accounts

It’s easier to keep track of your investment income if your accounts are in as few places as possible. Hryck suggested consolidating financial accounts to simplify record keeping and for easier cash flow tracking. However, “consider the consequences from a tax perspective prior to making any moves, such as selling stocks or mutual funds,” he said.

12. Reduce Your Investment Portfolio’s Risk Profile

“The worst time to take a negative in your portfolio is right before retirement,” said Tom Till, financial professional and owner of APPS Financial Group in Houston, Texas. “It will directly affect how much you can live on during retirement.”

A financial planner can help you adjust your exposure to risk. Do-it-yourselfers can consider taking an online risk tolerance questionnaire. “I have seen people have to work an extra two to four years because they failed to take this step when close to retirement,” Till said.

13. Create a Distribution Strategy

The accumulation and distribution of assets require two entirely different strategies and, particularly for those with a long retirement horizon, there will likely be a need for simultaneous accumulation and distribution plans. “It is key to work with someone who is knowledgeable about distribution in this phase of life,” said Till. Distribute too much or earn too little on existing earnings, and you risk not having enough capital to make it through retirement.

14. Eliminate High-Interest Debt

High-interest debt can quickly eat away at any retirement budget, even the most well-funded. “Credit card debt can carry an interest rate of up to 20 percent,” said Till. “Student loan debt never goes away, and the government can choose to withhold your Social Security benefits if you have outstanding student loans.”

15. Relocate for Retirement

If you’re planning to retire elsewhere, Benjamin Sullivan, certified financial planner and portfolio manager with Palisades Hudson Financial in Scarsdale, N.Y., suggested moving or buying a second home while still employed in the work force. “While many retirees can qualify for a mortgage, it’s much easier to prove you have the income to support a mortgage if you make the move while still earning a full salary,” he said.

16. Work Extra Hours

“Some pensions and severance payments are calculated based on the income you earn in your last few working years before retirement,” said Sullivan. “Therefore, working additional hours or taking on additional projects in your final working years can give you extra income now and in the future.” In other words, a little extra hard work now can create a substantial payoff once you transition out of the work force.

17. Secure Long-Term Care Insurance

“Lack of adequate insurance coverage can lead to high unexpected costs that may cause you to go into debt,” said Harrine Freeman, financial expert and CEO of H.E. Freeman Enterprises. The majority of bankruptcies result from an unexpected, expensive medical concern. Long-term care insurance can help defray the high costs associated with a long-term or unforeseen ailment.

18. Refinance or Pay Off Your Mortgage

“The thing you absolutely must do is straighten out your mortgage financing before retiring, because you may not qualify with your reduced income after retirement,” said Casey Fleming, author of “The Loan Guide: How to Get the Best Possible Mortgage.”If you don't do this, you may find yourself with too high an interest rate that you can't get rid of, too high a payment for your new, lower income, or plenty of equity but no way to access it readily.”

19. Declutter Your House and Mind

“Clearing our mental clutter is an essential step to getting ready for the next chapter in our lives, which often includes getting rid of stuff,” said Catherine Allen, co-author of “The Retirement Boom: An All-Inclusive Guide to Money, Life, and Health in Your Next Chapter.” “Our kids and grandkids are minimalists and don’t want to save Aunt Hattie’s china or Grandpa Paul’s stamp collection,” she added. It’s probably not worth as much as you think it is, anyway.

20. Know How Your Income Affects Your Taxes

“When an individual’s ‘combined income’ — defined as half your Social Security benefit, plus your other adjusted gross income — exceeds $25,000 as a single person, your benefit becomes taxable,” said personal finance author Joe Taxpayer. “Simply put, the tax burden on $30,000 of Social Security benefits and $20,000 from retirement funds will be far less than if the two were reversed.” Everyone’s situation is unique, but a sit-down with a tax expert can help reduce your overall tax burden throughout your retirement years.

21. Know When to Start Collecting Social Security Benefits

Most Americans take Social Security before full retirement age, according to the Social Security Administration. "Once you start, it’s irrevocable and you can leave hundreds of thousands of dollars on the table,” said Steen.

“For each year you delay benefits past age 62, you gain a 6 to 8 percent increase in lifetime annual benefits. That adds up quickly,” Steen said. You can check your personal Social Security benefit numbers at

22. Bone Up on Interests and Hobbies

Many pre-retirees forget to account for how they’ll spend their time once they’re no longer headed to the office each day. “Chart out your time both at the macro-level (annual vacations, trips, etc.) and at the daily level — what will you do immediately after waking up?” suggested Paula Pant, personal finance blogger at the site Afford Anything.

If you fail to plan ahead, “you'll develop restlessness, spend too much money out of boredom and potentially jump back into the workforce due to a lack of anything else to do,” she said.

23. Apply for a Reduced Real Property Tax Program

“Many of the elderly lose their homes due to the inability to pay their real property taxes and in some cases, the amount owed is less than $1,000,” said Freeman. “Owing taxes during retirement will reduce your monthly cash flow and may put you in a financial bind that may take months to recover from." However, many states offer property tax relief for qualifying seniors, so it can be worthwhile to check into what your state might offer.

24. Renew Your Home Warranty

“Home repairs can range from hundreds to thousands of dollars per repair, and may lead to usage of credit cards if you cannot afford to pay for the repairs on your fixed income,” said Freeman. An up-to-date home warranty can cover many unexpected repair costs, which can help keep a retiree from busting the budget.

25. Build an Ultra Emergency Savings Account

“The standard advice for emergency savings accounts is to have six to twelve months’ worth of living expenses. However, if you plan to no longer have earned income, increase your emergency savings to 18 to 24 months’ worth,” said David Auten and John Schneider of The Debt Free Guys blog.

“For the 12 months leading into retirement, cut your expenses and put all additional savings into your ultra-emergency savings account,” they added. That way, it can help keep invested assets secure, if and when an unexpected financial emergency occurs.

26. Review Family Financial Obligations

An emotional drive to help loved ones financially can erode a nest egg. “Helping out family and friends is great, but don't do it at the expense of your retirement savings,” said Steen. “Outliving your resources is a real risk. So even if you think you have the cash available, seek professional advice before making a decision.”

27. Review Life Insurance Coverage

When you retire, you might lose the group life insurance coverage offered through your employer. If you “still have financial obligations such as dependent children, a mortgage or a car loan, consider buying a private life insurance policy if you’re entering retirement with debt, or if you would lose benefits if you or your partner dies,” suggested Steen.

28. Consider Health Care Coverage

“Knowing exactly what to expect from your health care benefits is vital for retirees. Fidelity has calculated that a 65-year-old retiring couple will need $245,000 for health care over the span of their retirement,” said Birken.

The first step she recommends is a meeting with your human resources department to find out if you’re one of the lucky few who will receive employer-covered heath care during retirement. If not, find out when your benefits will lapse and, if under age 65 when you retire, what you’ll need to do to sign up for COBRA.

29. Get Organized

Organization isn’t just to make your life easier in retirement, it’s also so loved ones can easily find key documents in case of emergency and if you’re unable to access them yourself. “Compile critical information in a safe place, such as a fire safe,” suggested Allen. “Keep paper copies of important documents, in case you lose the electronic.”

30. Check Your Emotional Readiness

“Just because ‘everyone’ retires at age 65 doesn’t mean you have to do the same,” said Steen. Before leaving your career, ask yourself if you’re retiring because it’s something you look forward to, instead of something you expect to do at a particular age milestone.

“If you are very unsure of the decision to retire, and have a choice, then don’t do it,” said Steen. “Working longer, perhaps at something new and different, can help you maintain yourself, both financially and mentally.”

This article was originally published at


28 Retirement Mistakes That People Make

4 Millennials Share How They Maximize Cash-Back Rewards

10 Best and Worst Retailers of the Year

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


GOBankingRates is a publication for all things personal finance, that reaches billions of readers. We empower our audience to live richer in your bank account, richer in your personal goal fulfillment, and richer in how you explore the world. Whether you want to know which bank has the best CD rates, where you can retire on a budget or which tech stock to invest in, you’ll find the answers on GOBankingRates.

Learn More