What Do I Need To Do Before I Retire


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What Should I Do 5 Years Before Retirement?

As with most service relationships, there is trust to be gained and bonds to be built. Doctors, lawyers, and even the kid down the road who mows your lawn are trusted to do their jobs in the best interest of their patient or client. These relationships are what the service industry is built upon. Trust is of the utmost importance in your health, personal, and financial wellbeing.

The financial industry is a mess of actual financial planners and product salesman masquerading as financial advisors. For your average consumer, it can be hard to tell who is who. An excellent place to start is by looking for an AIF® or Accredited Investment Fiduciary®.

At Barber Financial Group, our financial planners are Accredited Investment Fiduciaries®. Your needs take precedence over our financial planners. They are required to put your interests ahead of their own. Our financial planners work directly with our team of in-house CPAs, estate attorneys, Medicare experts, insurance specialists, and a top-tier customer service team to address all your retirement needs.

Many of you might have a CPA of your own, and thats great, but it brings us to our next thing to do before you retire in the 2020s

Establish A Financial Plan And Make Sure Your Retirement Savings Are On Track

In preparation for retirement, its important to establish a financial plan that takes your needs, wants, and wishes into consideration. Youll also want to ensure you have the resources available to meet your retirement needs, goals, and objectives.

Meeting with a financial professional can help. Together, you can determine how much youll need to save for retirement by factoring in life expectancy, planned expenses, an anticipated inflation rate, taxes, and more. If youve identified a shortfall, youll want to determine ways to accelerate savings to try to narrow the gap.

Create A Plan For Long

As of January 2020, 7.5 million Americans have some form of long-term care, according to the American Association for Long-Term Care. And, on average, a person spends three years in long-term care. While expenses vary widely, long-term care can easily cost thousands of dollars per week.

With this in mind, you never know for sure if you will need care or not. Therefore, its important to have a plan for how you and your family will handle long-term care should you need it. You may want to purchase long-term care insurance and evaluate what kind of facility you would like to be in, should the need arise.

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How Old Do You Have To Be To Retire

Full retirement age, or the age you need to be to collect full Social Security benefits, is 66 years and two months for those born in 1955 and will gradually increase to 67 for those born in 1960 or after. How old you have to be to retire comfortably depends on the lifestyle you want to have and how much you have saved. The earlier you retire, the larger the nest egg you will need.

You May Need To Make New Friends


If you retire in your 50s, you may find that your current friends arenât around much because they still have full-time jobs. While you have the luxury of catching a matinee or playing a round of golf midweek, those in your social circle who are working nine-to-five donât.

If you find new friends, they are likely to be older, says Dennis Nolte, a certified financial planner in Oviedo, Florida: Many of my pre-60-year-old retirees, especially those who are active, lament that their new peer group is significantly older than they are and thus have a different set of expectations about diet, sleep schedule, even cultural references.â

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Retirement Can Be Tough On Couples

“Retirement is a major life transition, and you have to be patient with yourself and your spouse, says Patti Black, a certified financial planner in Birmingham, Alabama. Most retired couples do not look like those pictured in ads and commercials. You’ll have to decide how work around the house will change. Will you really share cooking, cleaning and yard work? And do you honestly want to be together 24-7, particularly if you downsize to a smaller home?

These decisions can have serious consequences for a marriage. Gray divorce, or divorce after age 50, has doubled since 1990 while declining across all other age groups, Black warns. And it is most often the wife who asks for divorce after age 50.”

John Waggoner covers all things financial for AARP, from budgeting and taxes to retirement planning and Social Security. Previously he was a reporter forKiplinger’s Personal FinanceandUSA Todayand has written books on investing and the 2008 financial crisis. Waggoner’sUSA Todayinvesting column ran in dozens of newspapers for 25 years.

Also of Interest

Determine Whats On Your Retirement Bucket List

You may have lists of things that youve always wanted to do. For example, if youve always wanted to fix up a hot rod or spend more time at the lake, be sure to write it down. You should take the time to decide what youve wanted to do, as well as when and how youll do it. This way, you can plan your time and budget accordingly.

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Do You Know When You Are Eligible For Social Security

Who are the people who receive Social Security benefits?

Social Security helps older Americans, workers who become disabled, and families in which a spouse or parent dies. As of June 2019, about 177 million people worked and paid Social Security taxes and about 64 million people received monthly Social Security benefits.

Why is it important to know when to claim social security?

Other blind spots, such as letting fears the program will run out of money get the best of you, can also hurt your retirement plan. Deciding when to claim Social Security retirement benefits is probably one of the most important financial decisions you will make in your lifetime.

Why You Should Check In With Social Security Too

Your Pre-Retirement Checklist | What to Do Before You Retire

If you need your Social Security retirement benefits to start right after you stop working, make your application now. Starting early gives you time to address possible hiccups. You can apply up to four months before you want your benefits to begin, as long as youre at least 61 years and 9 months old.

Note that you receive benefits for a particular month in the following month. So, for example, if you go on Social Security in June, you wont receive your first check until July. You can apply online at ssa.gov or by calling Social Securitys toll-free number .

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Start Planning Your Taxes For Retirement Now

A common misconception about taxes is that youll stay in the same tax bracket or even go to a lower tax bracket, but thats often not true. Taxes in retirement are more complicated than while youre in your earning years. Your retirement income is often located in different types of accounts, all which have different tax implications. This isnt necessarily a bad thing, but you need to understand how to utilize these accounts in a tax-efficient manner.

Tax diversification and asset location are only part of the puzzle. Understanding how Social Security can affect your taxes is also an essential factor. You might say, But Social Security is tax-free, right?! Not always. There are considerations to analyze like required minimum distributions , which we will discuss a bit later as well.

Forward-looking tax planning is a strategy of saving money on taxes over the years rather than looking at each year in a vacuum. If you plan your strategy over the years instead of one year at a time, youll see net savings on your tax bill over those years. It might be a bit late for these strategies in 2019, but JoAnn Huber, Partner and CPA at Barber Financial Group, wrote 2020 Year-End Tax Planning for Retirees. I suggest you read it to get a better understanding of the complexities of taxes in retirement.

Envision What Retirement Is

Perhaps its not that surprising that many people arrive at retirement and realize they havent given a lot of thought to what they want from it. After all, they were too busy working, raising their families and handling the day-to-day crises that life dealt them. But suddenly, its time to give up much of their old routine and try something new, and they dont know what that new will be.

Are they going to travel? Volunteer? See the grandkids more often?

If youre in that situation, try to envision what retirement looks like to you. Write it down and make it as vivid as possible. Putting it on paper helps make it seem more concrete, and it will be easier to turn your dream into reality.

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Options If Youre Under Age :

  • Retiree medical coverage through your employer.
  • The insurance policy of a spouse/partner .
  • Coverage through COBRA to continue health insurance for up to 18 months after losing your coverage through work. COBRA can be pricey because you pay the full premium . If you have dental and/or vision insurance through your old job, thats included as part of COBRA, too.However, if you turn 65 during those 18 months, you must apply for Medicare.
  • A Health Insurance Marketplace plan. Availability varies from state-to-state and depends on your household income. Visithealthcare.govto learn more.

Develop A Strategy For Claiming Social Security

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If you’re like most seniors, Social Security will come to provide a large portion of your retirement income. But while your benefits themselves are calculated based on how much you earn during your career, the age at which you first file for them can cause that number to go up, go down, or stay the same. That’s why it’s important to create a strategy for claiming benefits rather than go in blind.

For example, if you file for benefits at your full retirement age, which is either 66, 67, or 66 and a certain number of months, you’ll get the full monthly benefit you’re entitled to based on your work history. If you delay past full retirement age, your benefits will get a boost. And if you file before full retirement age, you’ll face a reduction in benefits, but you’ll also get your money sooner. There’s no right or wrong answer when it comes to choosing a filing age, but what you should do is know your full retirement age and understand the consequences of claiming benefits at various points in time.

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Medicare And Health Benefits

Retiring at age 65 allows individuals to be eligible for Medicare otherwise early retirees will need to budget for out-of-pocket costs to purchase health insurance.

An individual applying for health insurance that complies with the Affordable Care Act pays an average of $456 per month in premiums. By contrast, in 2022, the standard Medicare Part B premium is $170.10 per month and it gets you coverage with a relatively low deductible of $233 a year.

To be well protected, consider prescription drug coverage and perhaps Medigapor Medicare Advantage. Prescription drug coverage premiums average $33 a month in 2022. Medicare Advantage premiums average $19 a month in 2022.

Medigap is private insurance designed to supplement traditional Medicare and prescription drug coverage. Note that if you don’t sign up for prescription drug coverage if retiring at age 65 along with Medicare, you can pay a higher penalty rate for it when you do sign up for the rest of your lifeunless you are covered by an employer drug plan.

Financial experts recommend that your retirement income should be about 80% of your final pre-retirement annual earnings.

Here Is How To Cut Down On Your Everyday Expenses Now

  • Check your spending habits and identify places where you are overspending:

Many times we overspend unconsciously. Things have us tempted, and we tend to buy them even if we donât need them.

For example, I have an inclination towards soft toys. Whenever I see a beautiful soft toy that captivates my heart, I am drawn to buy it. But then I realized how much I overspent in a year because of this love for soft toys.

So, the first thing you need to do to save more money is to check your spending habits and identify places where you overspend.

  • Create a proper monthly budget:

You know the word budget is not a filthy word make it your friend. Creating a monthly budget and sticking to it is one of the best ways to save money.

No doubt, it is rewarding, but it is hard to implement too. However, if you stick to your budget and keep saving, youâll experience the joy of saving in a short amount of time, which is much more than the joy of spending.

You can put all the money saved in your retirement savings and pave your way towards a secure retirement.

  • Cut down on your utility costs:

According to experts, your utility costs should be no more than 8-10 percent of your monthly income.

Along with this, you can also make sure that your electronic devices like Air conditioners function at the maximum of their efficiency. Such simple steps can really help you save money and put it in your retirement account.

  • Bid adieu to credit card usage:

  • Cut costs on transportation:

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Do I Have To Give A Notice Period Before I Retire

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So, youve made the decision that youre ready to retire . . . now what? Many people come to the decision but they arent exactly sure what to do next or how to set their plan in motion. If youre made the decision to retire, chances are you are still currently working so youll need to retire from your job.

If the company you work for has benefits into retirement, there could be a process for retiring to make sure you get the pension and benefits package your company offers.

This begs the question: do you need to give a notice period before you retire or is it similar to resigning? Heres what you need to know.


  • Getting Yourself Prepared for Retiring
  • Review The Risk In Your Portfolio

    How Much Do I Need to Retire? 3 Numbers You Need to Know Before Retiring

    How much risk do you have, and how much risk do you want? Often, when people review their portfolios, they discover they have more risk than they realized, and they shift some of their investments into more stable funds.

    A rule of thumb thats often used is to subtract your age from 100 to determine how much to invest in equities. If you are 60, then you would put 40% of your portfolio in the market and keep the other 60% in something less volatile. Of course, general rules dont work for everyone.

    If you have done a great job of planning for retirement up until now, its possible you can and should reduce the risk in your portfolio. But if your retirement planning failed to measure up, you might need more risk to try to get back on track. Otherwise, you could face another risk living longer than your money lasts.

    Yes, this is a lot to think about and to work your way through as retirement approaches, but youll be glad you took the time to do it.

    And remember, you dont have to do it alone. A financial professional can help you tackle the more daunting parts, providing advice to improve the odds that retirement will be everything you want it to be.

    Even if you dont know what that is yet.

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    Additional Thoughts On Retirement Helps

    Sort out your end of life plans:

    âLive before you die, so that death is also a lively celebration.â B.K.S. Iyengar.

    Iyengars words highlight what we all should ideally do. But, most of us do not live fully. So, ask yourself, do I live fully?

    You may be an exception, but the truth is that most of us donât take the time to craft a life we just muddle through. We spend most of our time working and have very little time doing things that make us feel alive.

    If you really want to live before you die, donât forget to sort out your end-of-life plans before you retire.

    Once you retire, you can do many things you wanted to do when you were young, but never got the chance to because of work or other engagements.

    You wonât want to spend even a minute of your days after retirement on making plans and figuring out ways to make them work.

    Start now and create your bucket list On your list, put in items, destinations, and wishes youve held close to your heart all these years.

    Begin to generate a rough idea of how youâll do these things. For example, if you want to travel to a foreign country, create a plan regarding the places you would love to visit, people you would love to take along, how long you would like to stay there, and so on.

    Here Are Tips To Help You Pay Off Your Debt Before Retirement

    • Start a side hustle:

    If you feel that your current income is insufficient to help you pay the debt before retirement, you can start a side hustle.

    If you choose a side hustle that you would love to engage in, like photography, handicraft design, and managing social media for small businesses, then you wouldnât even have to feel stressed.

    In the words of Marc Anthony, âIf you do what you love, youâll not have to work a day in your life.â So, try to choose a side hustle that doesnât lead to additional stress in your life while helping you make some extra money to pay off your debts in time.

    • Minimize credit card usage:

    Interest rates on credit cards are really high. Howard Dvorkin, the CPA and chairman of debt.com, says, âRight now, credit card interest rates are hovering around 20%.â

    This stat implies that you are paying a dollar for every five you borrowed. Such high rates of interest can not only eat away your current income, but can also leave you struggling during your retirement years when youâll have to live on a fixed income.

    So, you must minimize credit card usage now and all excess spending. But, of course, if you can stop using your credit card, thatâs even better.

    • In the case of federal student loans, try seeking loan forbearance:

    Many times people carry student loan debt into retirement. In 2017, the Consumer Financial Protection Bureau found that around 2.8 million adults over age 60 carried student loan debt at an average balance of $23,500.

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