Get Ready to Retire: A Checklist for the Decade Before Your Retirement Date

Updated: July 7, 2023

Taking a series of steps in the 10 years before retirement can help protect your plans, create a smoother transition, and achieve the retirement lifestyle you’ve envisioned. The checklist below can help you organize the final stages of planning before your target retirement date.

Review your savings

 Check current balances in retirement accounts and review your savings plan to see if you’re on track to meet your retirement goals.

According to the Department of Labor, retirees should plan on needing 80% of their pre-retirement income to cover expenses in retirement.¹ For someone with a household income of $125,000 before retirement, that would mean roughly generating $100,000 annually from a range of income sources. A financial professional can help develop a personalized retirement savings target.

 Consider taking advantage of catch-up contributions after age 50.

Catch-up contributions of $1,000 annually are available to IRA/Roth IRA holders over age 50, while 401(k) plans allow people over age 50 to contribute an additional $7,500 annually. Making an additional $7,500/year contribution to a 401(k) can add up to $99,000 in additional savings over 10 years.²

 Build up emergency savings.

An emergency fund that covers three to six months of expenses is typically sufficient during working years, but retirees may want to consider having a bigger cushion – enough to cover 12 months of expenses – in retirement to help prevent large, unexpected expenses from impacting their income strategy. For example, without sufficient savings, a large bill might force a retiree to withdraw more money than expected from an IRA or tap into an income source earmarked for later in retirement.

Adjust your investment mix

 Meet with your financial professional quarterly to assess your investment mix and discuss potential adjustments.

Many people choose to reduce exposure to high-risk stock investments as retirement approaches and put more of their savings into assets that are considered more stable.

Make a plan to pay off debt

 Develop a strategy to pay off high-interest debt, such as credit cards or car payments, before retirement.

Consider whether paying off major debts, such as a mortgage, makes sense for your situation. Reducing debt creates more financial freedom and flexibility in retirement.

Estimate retirement expenses

 Work with your financial professional to create a detailed estimate of projected retirement expenses.

For at least one year before retirement, try to live on that budget to see if it’s feasible. Our Future Income Planner can help you create a hypothetical budget.

Estimate health care costs and options to cover care

 Explore private insurance options to help supplement long-term care costs.

Develop a plan for retirement income

 Think about how you’ll collect income in retirement.

Examine guaranteed sources of income in retirement, such as Social Security and pension payments, as well as potential income from other financial products and investments. Compare total expected income against estimated expenses. If there is a gap, work with a financial professional to explore options for guaranteed retirement income, such as annuities.

Review options for Social Security

 Consult with your financial professional to learn how different Social Security claiming strategies could impact your plans for retirement and figure out the optimal time to start collecting benefits.

For example, in 2023, the maximum monthly Social Security benefit that an individual can receive if they file a claim at age 62 is $2,572 per month. But the maximum for those who claim at age 70 is $4,555.³

Develop a plan for enrolling in government benefit programs

 Connect with your financial professional to see what parts of the Medicare health program you automatically qualify for and which parts you want to elect to pay for. Then, ensure you have the correct paperwork to file for them.

Important consideration: It takes three months of lead time to process applications for Social Security and Medicare, so plan accordingly.

The final decade before retirement is an opportunity to strengthen your plans for retirement and tie up any remaining details that can help secure your future. Following these steps, and consulting with a financial professional for additional information, can help you make the most of this time.