I'm About To Retire

Couple meeting with their advisor

Perhaps you're done with life's major expenses—raising kids, college, weddings, and your mortgage. If not, you very likely will soon be. And you're also probably still at the height of your earning power. That's a plus.

If you're like most of our long-term clients, you've got a realistic plan for your retirement and have been saving and investing wisely to pay for it. If not, there's no time like the present to start considering the following:

  • Will you work? Perhaps you're a "people person," and you look forward to the morning water-cooler chats. Or perhaps you find work fulfilling. Or—a situation that's increasingly familiar—you realize that you'll simply need to keep working for a while longer, to build up (or rebuild) your nest egg. Spouses should be sure to discuss these matters in as much detail as possible.
  • When will you retire? Starting Social Security early packs a financial double-whammy: You'll no longer be earning money, and your Social Security and/or pension benefits will be lower. You also may lose your corporate benefits, including health coverage, which is discussed below.
  • How much will it cost? Think in more detail about what your retirement expenses will be. Keep in mind that they generally change over time. Your mortgage and work-related expenses will likely decrease; your health costs will likely increase. In general, retirement expenses are usually high at first (even with Medicare), lower in the middle, then higher again later, if health declines.

Next, identify your sources of income for retirement and do some realistic calculations about how much each will contribute. How much will your current savings, investments, and Social Security benefits be worth when you retire, and how long will they last? What effect will inflation have on your nest egg?

If you haven't already, now might be a good time to consolidate your various retirement accounts (i.e., your 401(k), IRAs, etc.) into a single, well-balanced, well-managed IRA. Before you do this, we recommend speaking with a qualified independent advisor, since taxes and penalties could apply if these rollovers aren't done properly.

There are a host of additional considerations as you prepare for this major transition in your life, including your estate plan and insurance (life, health, and long-term disability, homeowners, and personal liability). We recommend scheduling time with a qualified independent advisor.

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