Preparing a retirement checklist: Smart steps to take 

It’s never too early to start preparing for retirement. The sooner you start investing, the more time you have to save. But setting money aside is only part of a retirement plan; to build a reliable source of retirement income, you should also consider creating an investment strategy. A well-thought-out retirement checklist can help help clarify your goals and organize your finances, giving you a clear pathway to follow.

Read on to learn how to plan for retirement and what you should include in a comprehensive checklist. 

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Why you need a retirement checklist: 4 benefits

When preparing for retirement, a checklist can help provide you greater control over your future. Here are four reasons you shoudl consider one.

1. Reduces stress

The transition to retirement can be stressful and overwhelming. A checklist will help you break this process into smaller, more manageable steps. Knowing what you need to do and when can reduce stress, giving you clear, actionable items that drive progress toward your goals. 

2. Helps prioritization

Retirement planning involves many moving parts, from estimating healthcare costs to choosing where you want to live. A checklist helps you identify and rank your priorities, whether that’s securing long-term housing or setting aside funds for travel. With a clear vision, you can make informed decisions about your resources. 

3. Prevents mistakes

A retirement checklist makes it easier to track important deadlines. Missing your Medicare enrollment or forgetting to file pension paperwork can be costly, as small oversights may lead to lapsed coverage or disrupt the growth of your savings. 

4. Improves decision-making

Retirement planning often means making complex financial decisions across multiple investments, from managing your portfolio to choosing when to withdraw. A checklist provides a structured overview of your investments, helping you understand what needs your attention. 

12–24 months out: Begin preparing your checklist

A year or two away from retirement is an ideal time to prepare a checklist. Here are the crucial steps you should be taking.

Estimate retirement expenses and income 

Start by estimating your cost of living in retirement, including essential expenses like rent or mortgage payments, utility bills, and insurance. Don’t forget inflation: Things will cost more 10 years into your retirement. Next, estimate your expected income from sources like Social Security, annuities, and 401(k)s. You’ll then have a good sense of how closely your budget and projected expenses align and whether you need to consider building in other sources of retirement income. 

Evaluate long-term care and health coverage needs

Healthcare is one of the most significant expenses in retirement. If you plan to retire before age 65, you’ll need to secure health insurance to bridge the gap until Medicare eligibility. Even after 65, Medicare doesn’t cover all medical expenses, including many long-term care services. Take time to understand what’s covered and what supplemental coverage you may need. Estimating these costs now will help you avoid financial surprises later.

Consider downsizing or relocating

If your projected income falls short of covering your expenses, it may be time to consider downsizing. Moving to a smaller, more affordable property can free up home equity and reduce ongoing maintenance costs. It can also lower your monthly mortgage or eliminate it entirely. Relocating to a more cost-effective area can also stretch your retirement dollars further. 

Begin transitioning your investment strategy toward preservation 

As you approach retirement, principal preservation becomes more essential, and your investment focus should shift from growth to stability. That often means reducing exposure to high-volatility assets and increasing allocations to bonds, dividend-paying stocks, or annuities. 

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6–12 months before retirement: Finalize financial plans

Knowing precisely what to do six months before retirement can ease your transition. Here are tips to help you prepare as retirement draws closer.

Lock in your retirement date and communicate it with your employer

Determine the exact date you want to retire and inform your employer. Providing them with plenty of notice will allow them to prepare the necessary paperwork, convert accrued time off into cash (if applicable), and take any other final steps before you leave. 

Review retirement account withdrawal strategies 

Depending on your age, you may not be able to access your retirement investments without paying a penalty. For example, the IRS charges a 10% early withdrawal penalty for certain retirement products, including traditional IRAs, 401(k)s, and 403(b)s, if you make withdrawals prior to age 59 1/2. You can begin collecting Social Security at 62, but many retirees wait until age 70 to increase the size of their payments. Certain types of annuities allow annual withdrawals of up to 10% of your account value without incurring fees., though if prior to age 59 ½ an IRS early wtihdrawal penatly will apply.

Plan your lifestyle

Retirement gives you the freedom to decide how to spend your time. You may choose to pursue hobbies, start volunteering, or go travelling. Start by imagining what a typical day or week may look like. Perhaps you’ll be dining out frequently or taking classes. Once you have a clear vision, estimate the costs associated with that lifestyle. 

Confirm health insurance coverage

Review your Medicare eligibility and the coverage it provides, then evaluate whether you need additional protection. Consider your current health status, family medical history, and potential future needs to determine the right level of coverage. Ensuring you have adequate insurance can help safeguard your retirement savings.

What to do the month before retiring

Even a month out, there are still several things to do before retirement. Here’s a breakdown of the final steps to retirement. 

Double-check the paperwork

In the last 30 days before retirement, review your plan and ensure all your paperwork is in order. If you're expecting pension or annuity payments, confirm the start date. Make sure that your new healthcare coverage begins when your company benefits end. 

Set up automatic payments for insurance premiums or annuities

Automate recurring financial obligations such as insurance payments, annuity contributions, and loan repayments. This reduces the chance of missing payments during your transition to retirement.

Determine tax liability

Retirement investment accounts can have complex tax implications. For example, if you invested in a tax-deferred (qualified) annuity, the amount of tax you owe on the payouts will be higher than if you had purchased a non-qualified annuity. Discuss your tax liability with your accountant and ensure you withhold the correct amount of income taxes. 

Review your emergency fund and short-term liquidity needs

Confirm you have enough in your emergency fund to cover six to 12 months of expenses. Having a retirement savings reserve will help you avoid liquidating investments during volatile markets or when unexpected costs arise.

How Gainbridge can support your retirement planning

Gainbridge annuities offer guaranteed growth for your retirement savings. With a 30-day free look period and no hidden fees, Gainbridge annuities are a straightforward investment option, providing a reliable source of retirement income. If you want simplified investing and greater financial stability in retirement, contact Gainbridge today.

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This article is intended for informational purposes only. It is not intended to provide, and should not be interpreted asindividualized investment, legal, or tax advice. The GainbridgeⓇ digital platform provides informational and educational resources intended only for self-directed purposes.

Annuities issued by Gainbridge Life Insurance Company located in Zionsville, Indiana. Guarantees are based on the financial strenght and claims paying ability of the issuing insurance company,

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