1 Year Away? Here's Your Official Retirement Planning Checklist
By: Brian O'Connell

NEW YORK (TheStreet) -- In the armed forces, there's a term for people less than a 100 days from a return to civilian life: “two-digit midgets.”

If you’re a two-digit midget in terms of retirement, or even a three-digit midget with retirement a year away, you need to prepare for your golden years with a “retirement checklist.”

So says Larry Rosenthal, a certified financial planner and principal at Rosenthal Wealth Management Group, a Manassas, Va., investment advisory firm.

“Planning for retirement can be a burdensome task,” Rosenthal says. “While the transition can be difficult -- emotionally, mentally and financially -- the sooner you start preparing the better. Ideally, pre-retirees should begin planning years in advance, but many people find it can be difficult to get the metaphorical retirement ball rolling.”

To make that shift into retirement easier, Rosenthal recommends a retirement checklist to be addressed in the year before calling it quits on the career front:

Refinance your home: You want to make sure all of your fixed costs are as low as possible.

Conduct an insurance audit: You don't want any surprises with reduced benefits or increased costs.

Have a dress rehearsal: Practice living on your estimated retirement income six months before you actually retire. It’s important to see how your income stacks up against your expenses. (This goes hand in hand with your big-ticket purchases. Consider that one of the most overlooked retirement expenses is the car or truck you own. If you get a new car every seven years, that’s likely three cars in retirement.)

Reallocate your investments: Approaching retirement, you’ll want a more conservative plan to minimize unwelcome market surprises. You’ll also want to make sure your plan is customized to grow, protect and deliver income in the most tax-advantaged way.

Communicate:  It’s important to coordinate retirement plans with your partner and determine how one (or both) of you entering retirement affects your overall finances.

Address debt: Debt can drag down your savings quickly. Work to eliminate as much debt (credit cards, loans, mortgages) as you can.

Evaluate “big ticket” purchases: Delving into your savings for expensive purchases can deplete your portfolio. Think about what big-ticket items you may want in the years ahead and consider the financial impact.

Craft a long-term care insurance plan: It’s important for pre-retirees to prepare a plan to pay for long-term care insurance during retirement. Most people buy LTC insurance while they are working only to realize they haven’t budgeted for its current and increasing cost during retirement.

Your checklist should also include moves not to make on your retirement checklist. That “biggest mistakes to avoid” portion of the list includes:

Not filling time: You just got done spending about 10 hours a day working, including an average commute. Now you have to fill that time. Don't spend 10 hours a day blowing money on entertainment.

Not being active: Get up off the couch and get busy doing different things, don't just sit around.

Not being patient: You have plenty of time during retirement; you don't have to travel the world in the next 12 months.

Some people never really retire, Rosenthal adds. “They just stop their primary job and then go back to work right away in the same industry and end up working until they can't anymore -- and miss their retirement.”

If that’s you, add that into your retirement checklist. The good news is that your checklist is dynamic and flexible, just like your future in your post-career years.

—For more ways to save, spend, invest and borrow, visit MainStreet.com.

Sign Up Now for Our FREE Newsletter

Brokerage Partners

US Rate Map - National Mortgage Rates

Roll over states to see best rates.
Lower Rates Higher Rates

This illustration shows rates based on all terms and locations of a particular state. Products may not be offered by all institutions. Individual institutions determine the availability and required qualifications of their products. Product restrictions may apply.


Calculator Access our Savings, Mortgage, Auto Loan and Personal Finance Tools here.