Here's Your Retirement Planning Checklist

A Retirement Planning Checklist could be very useful as you approach your retirement. To eliminate uncertainty you need to take control of your retirement planning and you need to monitor it closely.

Let me confess up front! I didn't use a checklist when I was approaching retirement some fifteen years ago. I just barged in! I was pretty sure that I made adequate provision for retirement. It was a gross mistake. More than ten years into retirement I'm much more careful.

The time you should think about your retirement planning checklist should be at least five years before retirement. And thereafter, even after retirement, visit your checklist annually.

Here's a checklist as I see it:

Track your spending
During your planning phase you probably drew up a detailed estimate or budget for your current spending. This you would also do during retirement.

When I started to track my spending I found that I was over budget virtually every month!

Define your retirement lifestyle
It could be your current lifestyle and you'll merely adjust your current estimate, or budget for spending, for inflation. However, you might want to travel extensively or pursue a passion or hobby more actively. It is very likely that your spending will change significantly after retirement.

Whatever your definition is, express it in monetary terms. Know how much money your retirement lifestyle would realistically require.

Top up as much as you can in the few years before retirement
Make sure your retirement provision plans are benefiting to their full extent as far as tax breaks on contributions and earnings are concerned. Consider deferred compensation plans and retirement annuities.

On this website we discuss all these plans in greater detail. Do visit those pages for more information.

Make an accurate analysis of your net worth
Start with your liabilities and be brutally honest. Past due bills and long term debt should be eliminated before retirement.

Then enumerate all your assets – conservatively. We all overestimate the worth of our home equity! Be careful and rather err on the conservative side.

Re-visit your health care provision
Whether we like it or not, fragility during our retirement years is a reality.

Re-work your retirement income planner
With the refined knowledge and estimates after you worked through the checklist above, re-visit your retirement income planner. Do some what-if scenarios with the retirement risks of longevity, higher inflation, capital depletion, etc.

On this website we look at many retirement planning related issues. We review retirement income planners, spreadsheets, worksheets, and we even suggest a handbook for planning retirement. If you have still some uncertainties after you worked through the checklist, do visit the related discussions.

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