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Retirement Planning Checklist

By: Financial Hotline
Summer 2026 (Vol. 44, No. 2)

Here's a practical, high-level checklist of basics to tackle in the year before retirement.

These focus on finances, health coverage, lifestyle, and logistics to help ensure a smoother transition. Everyone's situation differs but these are some steps to help you get started:

1. Run the Numbers: Assess Finances and Create a Retirement Budget
  • Estimate your expenses: Track current spending and project retirement costs (housing, food, transportation, healthcare, travel, hobbies). Use the common '80% rule' as a starting point. This means aim to replace about 80% of pre-retirement income for a similar lifestyle, adjusting for changes like no commuting or work expenses.
  • Identify income sources: List Social Security, pensions, 401(k)/IRA withdrawals, investments, annuities, etc. Calculate the 'income gap' (expenses minus guaranteed income).
  • Build or review an emergency fund: Aim for 6-24 months of essential expenses in liquid, low-risk accounts (e.g., high-yield savings) to avoid selling investments in a downturn.
  • Pay down debt: Prioritize high-interest debt (credit cards, etc.). Consider paying off or strategizing for mortgage/car loans on a fixed income.
  • Max contributions if possible: In your final working year, boost 401(k) or other retirement accounts (including catch-up contributions if age 50 or above).
  • Action: Create a detailed monthly budget and 'stress test' it - simulate market dips, higher inflation, or unexpected costs.
2. Plan Social Security and Pensions
  • Decide claiming strategy: Review your benefits at ssa. gov. Claiming at full retirement age (66-67 for most) gives unreduced benefits; delaying to 70 increases them 8% per year. Claiming early (age 62) reduces them permanently. Factor in spousal or survivor benefits and taxes.
  • Apply on time: If starting benefits at retirement, apply 3 to 4 months early.
  • Pension options: If you have one, compare lump sum vs. annuity, single life vs. joint survivor, etc.
3. Handle Healthcare and Insurance
  • Medicare (if turning 65): Initial enrollment is 3 months before to 3 months after your 65th birthday. Missing it can mean lifelong penalties. Decide on Original Medicare and supplements (Medigap) vs. Medicare Advantage, plus Part D for drugs. Coordinate with employer coverage to avoid gaps.
  • If retiring before 65: Research COBRA, ACA marketplace plans (subsidies depend on income), or spouse's plan. Bridge coverage can be expensive.
  • Review other insurance: Life, long-term care, disability, homeowners and auto. Update beneficiaries.
  • Budget for any additional healthcare: If you have existing health conditions or think you may need assisted or long term care in the future, you may want to consider Medicaid Planning.
4. Optimize Investments, Withdrawals, and Taxes
  • Decide on 401(k)/retirement accounts: Will you want to roll over to a traditional IRA for more options? Review fees and current investment holdings to assure best choices for long term stability.
  • Develop a withdrawal strategy: Which accounts should you access first (taxable, tax-deferred, Roth)? Aim for sustainable rates (for example, the 4% rule is a guideline, adjusted for inflation and market conditions).
  • Tax planning: Consider Roth conversions in lower-income years, required minimum distributions (RMDs), capital gains, and how withdrawals affect Social Security and Medicare taxes.
  • Shift portfolio gradually: Move toward more conservative allocations (bonds, dividends) for preservation, but maintain some growth for longevity.
5. Legal and Estate Planning
  • Update or create: Will, living trust, power of attorney (financial and healthcare), advance directives, beneficiary designations on all accounts.
  • Review titling of assets and any trusts.
6. Lifestyle and Non-Financial Prep
  • Define your vision: What will your days look like? Hobbies, travel, volunteering, part-time work? This helps with budgeting and purpose.
  • Trial run: Practice living on your projected retirement income and budget for a few months.
  • Location and housing: Consider downsizing, relocating, or modifications for aging in place.
  • Talk to your HR and benefits coordinator if applicable: Confirm final paycheck details, unused vacation, retiree benefits, health coverage end date.
  • Organize documents: Gather tax returns, account statements, insurance policies, etc., in one place.

Timeline Tips

  • Now (12 months out): Big-picture planning, budgeting, debt reduction, max contributions, Social Security and Medicare research.
  • 6 months out: Finalize withdrawal plan, stress test, insurance decisions.
  • 1-3 months out: Apply for benefits, roll over accounts, set up direct deposits, practice the transition.

Keep your key focus on what you can control, your spending, basic asset allocation and timing of benefits. Then build buffers for uncertainties like markets, health, or longevity. Tools like retirement calculators from www.SSA.gov can be helpful as well.