Tips for Pre-Retirement Transition Planning
What to do five years before you retire, three years before you retire, and one year before you retire
We all share a dream to someday retire, but that day cannot come smoothly without some planning and forethought. I love working directly with my clients to help each map out their own, unique journey toward that goal. While no two paths are exactly the same, there are some typical milestones most will navigate along the route.
Let’s review some of these common steps that you, too, may encounter in preparation for your retirement. Many people have the most questions in the years leading up to their impending retirement; specifically, five years, three years, and one year before they step back from full-time work. Let’s go over the key steps in those years just before you retire.
Five Years Before Retirement
While retirement planning should, of course, begin at the onset of your career, five years before you retire should be a critical milestone year. Once you are in the vicinity of five years before retirement, there are some items you may want to check off your to-do list. These may include:
Assess your financial standing with your advisor
Create a retirement budget for after you leave your career
Address outstanding debts that you may have
Review what you will need for insurance, after retirement
Begin portfolio adjustments as necessary
With five years still to go, this is a time to take an inventory. You need to see where you are before you can plan what comes next! Now’s the time to clarify things and make any necessary adjustments, so that you have time to button up anything that needs addressing in your remaining few years of working full-time.
Three Years Before Retirement
With three years until the finish line, you want to begin to make some additional adjustments to prepare your finances and lifestyle. This is the perfect time to:
Fine-tune your retirement income strategy
Handle healthcare planning
Make additional investments and portfolio adjustments
Create your post-retirement tax strategy
By the time you reach this stage, you likely have many plans aligned, yet you still have time to assess your status and make the necessary adjustments. Having just three years left to work full-time may not sound like much time for change, but small tweaks at this point can still affect your final goals.
One Year Before Retirement
One year away!? The finish line is so close that you can begin to taste it! Now is the time to finalize all your retirement plans. This is a good point to:
Finalize your retirement budget
Complete healthcare preparations
Set up income streams
Final portfolio adjustments
Complete administrative tasks with your employer, estate planner/attorney, tax planner, financial advisor, etc.
As you get your ducks in a row, lean on your trusted professional services team. They will have specific tasks and paperwork for you to complete as you complete the “homestretch” year before you retire.
Get Help: Retirement 101
No matter your age or stage, I am always ready, willing, and able to help you along the path toward retirement. There is never a time that is “too late” to start on your journey. Each person has to find their way in this life, but it makes all the difference to have a guide to help you along the way.
Your steps may look a bit different, depending on your starting point and ending goals. But knowing that you have a helping hand and knowledgeable coach in your corner can ensure your ride isn’t a bumpy one. Reach out today to set up a no-obligation appointment!