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Here’s Your Retirement Planning Checklist

A four-step guide to reviewing your future savings and income


(This article appeared previously on MarketWatch.com.) 

Many people who are planning their retirement need someplace to start — a list to begin their thinking. So here's my four-step checklist to ensure that you are financially prepared for retirement:

 
1. Calculate Your Projected Income 

Figure out how much income you might have in retirement from these common sources: 

  • Social Security  Create a "my Social Security" account to get estimates of your retirement, disability and survivors benefits. Additionally, you can use "my Social Security" to get your earnings record and the estimated Social Security and Medicare taxes you’ve paid. For more information on Social Security, check out the "Apply for Social Security” page at RetiredBrains.
  • Pensions The American Academy of Actuaries’ Pension Assistance List will provide up to four hours of free help to individuals interested in checking their pension plan's calculations. Visit the Pension Rights Center website for a list of projects and the states they cover. You can also call the toll-free hotline at the Labor Department’s Employee Benefits Security Administration, 866-444-3272.
  • Savings See if you’re saving enough with AARP’s Retirement Calculator.
  • Sale of assets  These could include real estate, personal property, antiques, jewelry, gold, collectibles and business interests.
  • Possible inheritances
  • Annuities
  • Life insurance values, if any 
  • Income from investments and retirement funds They include stocks, bonds, mutual funds, trusts and real estate

2. Estimate Your Projected Expenses

Calculate what you are likely to be spending each month in retirement. Check this Consumer Expenditure Survey from the U.S. Bureau of Labor Statistics for information on the complete range of consumers’ expenditures and incomes. Check your future buying power with the Labor Department’s CPI Inflation Calculator. Here are the most common big-ticket expenses: 

  • Rent
  • Mortgage
  • Credit card debt
  • Loans
  • Taxes
  • Health care (The average 65-year-old couple retiring in 2013 will need about $276,000 to cover medical expenses during the remainder of their lives.) For help determining your future health-care expenses, check out the One-Click Health Estimator on the HealthView Services site and visit RetiredBrains.
  • Insurance Auto, home, life, health, Medicare, long-term care and assisted living
  • Relocation -If you’re considering relocating, here’s a list of resources for boomers and seniors.
  • Travel/vacation costs

3. Review Your Estate Planning

Make sure your assets are discoverable and your papers are in order. 

  • List all your assets; contact information of your accountant, investment adviser and banker as well as the location of important documents, passwords, bank accounts and safety deposit boxes. Then, give copies of that information to your spouse or partner, your attorney and your accountant. Here’s a handy, printable form to help you capture all of this personal information and more.
  • Make sure you have an updated will, including a medical power of attorney.
  • Make sure your spouse or partner, attorney, physician and accountant understand your medical wishes in case you are unable to act.

4. Additional Things to Consider

To complete the process, take these actions as needed:

  • Reduce, consolidate or restructure your debt where possible. 
  • If you have any questions about the ability or reliability of your physicians, attorney, accountant or financial planner, consider finding a new one now. If you do not have a professional in each of these areas, get one.
  • Check the Northwestern Mutual Longevity Calculator to see how long you might live.
  • Visit ChoosetoSave.org for a list of more than 100 calculators to help with estimates and evaluations in almost every area you can imagine.

After discussing your retirement plans with your spouse or partner, do so with your financial planner, accountant and attorney. As time goes on, adjust your expected expenditures against realistic income/revenue expectations.
 
Once your list of assets is complete and its valuations are accurate, check to see if you will need to draw against them, and if so, how much per year. Project these numbers out with your financial adviser to ensure you will have enough to last.
 
If after a thorough review of your information you find yourself falling short of your retirement expectations, consider working longer or adjusting your projected lifestyle expenditures in retirement.

Art Koff is the founder of RetiredBrains.com, a site that serves boomers, retirees and people planning retirement; he’s also the author of Invent Your Retirement: Resources for the Good Life, published by Oakhill Press. 

By Art Koff
Art Koff is the founder of Retired Brains, a website that provides information about retirement for boomers, retirees and people planning to retire.@artkoff

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