Whether you plan to travel the world, explore your passions or just take it easy, retirement is full of endless opportunities. Ensuring you can comfortably live the lifestyle you want takes careful planning—both personal and fiscal. 

DO Start Early

Retirement investment can begin right out of college. After starting a job, find an amount of money that is comfortable for you and make an automatic monthly payment into the account. As you get older, your finances will get more complex, and you will want to start developing a plan with an adviser.

DON’T Stress About Starting Late

A late start is better than nothing! If you’ve waited to start retirement planning, you may want to consider a few options to get yourself on track. This could include adjusting your investment risk, making extra catch-up contributions or planning for reduced expenses in retirement.

DO Contribute a Percentage

When determining the right amount of money to set aside for retirement, plan to make it a percentage of your income instead of just a set sum. This can help result in a higher account balance at retirement, and it will insure your retirement investment continues to grow as your income increases.

DON’T Forget About Inflation

The effect of inflation may not always be obvious, but it can slowly eat away at your savings. Bonds are the typical safe investment for retirement, but your financial adviser could recommend alternatives such as fixed-index growth-only annuities, which can result in a return that better stands up to inflation.

DO Plan for the Unexpected

Health care and emergencies can result in substantial out-of-pocket expenses—especially if it leads to long-term care. If a couple has budgeted for $12,000 a month, what happens to their retirement model if one spouse suddenly requires $10,000 in monthly care? Having insurance is one way to take some of the risk off the table, especially since the odds of needing some sort of long-term care are high.

DON’T Plan on Working During Retirement

The Employee Benefit Research Institute found that while around 65% of retirees plan to work to supplement their retirement savings, only around 25% actually do. There are several reasons why working may not be an option—with the most common being health issues or disability. 

DO Pay Off Debt

Before retiring, make sure your debts are paid off. This will help your investments last longer. Work with an adviser to determine what type of payment method will work best for you. They may recommend paying off all your smaller debts before working on the larger one (i.e. the snowball method), or starting with larger, high-interest debris and then working down to the smaller, low-interest ones. (i.e. avalanche method).

DON’T Retire Too Early

Retirement may be calling your name, but you want to make sure everything is in order before you take the plunge. Retiring earlier means you have less time to invest but more years to fund. It also can negatively impact your social security benefits.

Retirement Checklist

  • Know what you’re going to get from social security. Pension income is becoming less common, but some people still receive it. If that applies to you, also know what your pension is.
  • Have a good understanding of how you’re getting your benefits. Most people get health and dental insurance through their employer, but you won’t anymore.
  • Set a budget. It doesn’t have to include everything, but you should have a good idea of what your expenses are. Retirement is a great opportunity, but you’re turning off the cash flow spigot. You need to spend responsibly.
  • Get your estate planning documents in order. You should have your will, trust, medical directive and power of attorney ready.
  • Organize your life, long-term care, house, car and umbrella insurance policies. You don’t want to take risks that might eat away at your net worth.