Visualize Retirement: Retirement Planning Checklist

How do you know how much to save for retirement if you don’t know what you’re saving for? By creating your vision—the Who, What, Where, When and Why of your retirement—you gain clarity about your retirement and what may be involved in achieving it. Some of the things to consider include:

• Your target retirement age. Although it’s difficult to anticipate the right time to retire or what unexpected situations may arise, set a goal of when you would like to retire.
• Where you want to live. Are you staying put in retirement or considering a move? As you develop your vision, consider whether you want to stay in your home, downsize, and/or relocate.
• What role, if any, work will play in your retirement. Work has become a larger part of people’s retirement lifestyle, either for financial reasons or for the nonfinancial benefits people receive from work, such as a sense of purpose and social engagement. Think through whether you envision work playing a minor or significant role in your retirement, or none at all.

Doing what you can to consider the nonfinancials—many of which have a direct financial impact—will help as you work toward making your vision a reality.

• Assess your potential spending needs in retirement. Creating your vision can help you understand your potential spending needs in retirement. Work with your financial professional to determine if your retirement saving strategy is sufficient to support your vision—giving yourself time to make changes to your saving strategy or adjust/reevaluate your vision before you retire.
• Understand your retirement income preferences. It’s helpful to understand what features of retirement income are important to you—e.g., the amount of income that is needed or the variability of your income from month to month—and what tradeoffs you’re willing to make—e.g., generally the more fixed and stable an income source is, the less likely it will have potential growth to keep up with inflation. Again, work with your financial professional to discuss your preferences and to determine the potential solutions to consider for your retirement portfolio.
• Educate yourself on Social Security benefits. It’s important to understand the different approaches for claiming Social Security benefits including coordinating your claiming strategy with your spouse. For example, to maximize the benefit for a surviving spouse, the higher earner could wait until age 70 before claiming benefits. You can get more information on Social Security at ssa.gov.
• Learn your options on Medicare. Medicare is the primary health program for retirees so it’s important to understand and carefully evaluate your options to determine which plans are best suited for your situation. You can get more information about the options, including premium costs and out-of-pocket expenses, on Medicare.gov. You may need to explore alternative health care coverage options, including the purchase of coverage through your state’s health care exchange, if you plan on retiring before age 65.
• Understand your sources of retirement income. Consult with your financial professional to map out all of your sources of income in retirement. They can work with you on a financial plan and investment strategy to help make your retirement vision a reality.