What to do in the Last Crucial Months before Retirement

 After years of saving and planning for retirement, you may be relieved and excited about the prospects of making the decision to move forward and retire.  If you are at this point, careful planning in the months leading up to retirement can help you ensure a smooth transition from employment to retirement. But many of us may be missing out on an important step in this process.

I recently read a statistic about women and retirement that surprised me.  Insured Retirement Institute (July 2012) reported that through planning with a financial advisor, women can take steps to increase their optimism and financial outlook for funding their retirement years.  Yet, nearly 53% of Baby Boomer women reported that they have not consulted with a financial advisor.  This is a pressing problem that has the potential to create long term financial and emotional roadblocks for women who are on the cusp of retirement.  The following information to help you gauge retirement preparedness.

Conversations to Have as Retirement Draws Near

These conversations should include a detailed look at the following areas of your financial plan:

  • Inventory investments, review employer retirement plan options and analyze Social Security benefits to make sure you can afford to leave the workplace.
  • Decide on an initial annual withdrawal amount that you feel you can take from your investments every year without substantial risk of running out of money.
  • If you are under age 65 and not eligible for Medicare, determine how you will cover health insurance needs.

Transition From the Work Force Into Retirement

Once you have a clear understanding of your retirement resources, another important part of retirement planning is to focus on the period of transition as you move from the work force into retirement.  Here are some suggestions to help make the transition run as smoothly as possible:

  • Reduce or eliminate credit card debt prior to retirement.
  • Carefully weigh your options for handling your mortgage.
  • Focus on your actual expenses today and think about whether they will stay the same, increase, decrease, or even disappear by the time you retire.

If you find yourself with unanswered questions, I recommend hiring a financial professional to help you understand financial options and opportunities for retirement.   The decisions you make in the final months leading up to retirement can have a considerable impact on your overall retirement plan.  

Laurie Renchik, CFP® is a Senior Financial Planner at Center for Financial Planning, Inc. In addition to working with women who are in the midst of a transition (career change, receiving an inheritance, losing a life partner, divorce or remarriage), Laurie works with clients who are planning for retirement. Laurie was named to the 2013 Five Star Wealth Managers list in Detroit Hour magazine, is a member of the Leadership Oakland Alumni Association and in addition to her frequent contributions to Money Centered, she manages and is a frequent contributor to Center Connections at The Center.

Five Star Award is based on advisor being credentialed as an investment advisory representative (IAR), a FINRA registered representative, a CPA or a licensed attorney, including education and professional designations, actively employed in the industry for five years, favorable regulatory and complaint history review, fulfillment of firm review based on internal firm standards, accepting new clients, one- and five-year client retention rates, non-institutional discretionary and/or non-discretionary client assets administered, number of client households served.

The information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete.  Any information is not a complete summary or statement of all available data necessary for making an investment decision and does not constitute a recommendation.  Any opinions are those of Center for Financial Planning, Inc., and not necessarily those of RJFS or Raymond James.