If there’s a retirement season, it’s spring or summer, when it feels like it did when the school year ended! But before you start planning your retirement party, Kiplinger advises you to take these steps first, as explained in article, “4 Actions to Take If You’re Retiring in 2017.”
Make sure to get the match. Your employer may “match” and/or offer “profit-sharing” contributions to your 401(k) or other retirement plan. You typically must be actively employed on the date of payment in order to receive these funds, so be sure that you understand the terms before setting your final work date.
You may want to up your personal contribution percentage to help you reach your annual maximum. Employers frequently limit the amount you can contribute to your plan from each paycheck, so you may need to increase your contribution percentage long before you retire to max out.
Review Your Risk Profile. Retirement is a major change in your life. It’s a transition from saver to spender, where you’ll start spending your retirement nest egg. Rebalancing your investments is critical to keep things in balance when you retire. You’ll need to work with your qualified financial professional to ensure your financial plan addresses your situation.
Don’t Underpay Your Taxes. When you retire, by default, taxes aren’t withheld on your retirement income. You have to opt in to have taxes withheld from your Social Security benefits, pension benefits, and IRA or 401(k) distributions. If you don’t have taxes withheld, you’ll need to pay estimated taxes.
Plan This Next Phase With Your Spouse. People often overlook planning how they’ll spend their time when they retire. After the novelty wears off, what will you do with your time? Will your spouse keep working when you retire? Do you both plan to travel, spend time with family or volunteer in the community? Create a plan that works for both of you.
Review Your Estate Plan. Especially for those retiring around age 65 or thereafter, there may be new estate planning opportunities for you. For instance, you might need to consider planning to qualify for Medicaid benefits or you might have a new grandchild to incorporate into your plan.
Whatever your decision, make sure to discuss it with your professional team—your CPA, financial advisor and estate planning attorney—to ensure you’re as prepared as possible and have taken advantage of all the opportunities. Especially with estate planning, as assets, family situation and the laws change, there’s a need to change and update your estate plan, as well, if it’s to effectively take care of your family.
For more information about the importance of ensuring your estate plan will take care of your family the way you intend, explore our website and contact us to schedule your consultation today!
Reference: Kiplinger (May 2017) “4 Actions to Take If You’re Retiring in 2017”