6 Steps Before Retirement

6 Steps Before Retirement

June 16, 2022

Let’s say you’ve been working for decades and are finally starting to plan what your retirement will look like. If you plan to retire within the next ten years or so, now is the time to start planning.

Begin by envisioning whether you want to work a part-time job, travel, or simply spend more time with family during your retired years. From there, you can realistically determine the financial resources you will need to support your chosen lifestyle. 

Too often, people don’t plan far ahead for retirement and find they are not adequately prepared when the time comes. Others save, but not enough for the life they desire to obtain. One in five Americans don’t save any of their annual income, while one in three Baby Boomers, the generation closest to retiring, has between $0-$25,000 in retirement savings.

This stage of life often comes with big expenses, especially if you’re planning to pay off your home or child’s tuition, which can be difficult without a steady income. Concerns about financial security in retirement often lead people to stay in the workforce longer.

These problems can be overcome with a proactive approach and by considering alternative methods of income. The CERTIFIED FINANCIAL PLANNERTM practitioners at Pacific Crest Wealth Planning recommend you consider these steps when planning for retirement:

Take Inventory of Your Assets and Liabilities

You already know how much you bring home with each paycheck, how much you have saved, and how much you have in a retirement fund. But what about the other assets your own, like cars, homes, cash, investments, or antiques? Hobbies and skills can also be considered assets if you can create an income from them during your retired years. Create a list of every asset you own and check if the worth of each item has increased over time.

Make another list of all your liabilities, such as car loans, mortgages, student loans, and credit card debt. Paying off your debt is an essential step to take before entering retirement.

Be in the Know of Your Health Insurance

Before you leave the workforce, take advantage of your employee healthcare plan. Make sure you are up-to-date with checkups, medications, hearing aids, vision, and dental needs. Staying on top of your health and living a healthy lifestyle will increase your quality of life and minimize healthcare costs.

Healthcare is one of the largest expenses you will have in retirement. A healthy male-female couple retiring at the age of 65 in 2019 can expect to spend $285,000 on healthcare expenses in retirement.

If you retire after the age of 65, you can rely heavily on Medicare for your retirement health needs. Medicare will cover most of your routine health costs, but you may want to get supplemental coverage to help pay for other health expenses that may arise as you age.

If you retire earlier, then you will not qualify for Medicare and will need to get health insurance on your own. Whatever your situation may be, make sure you are covered in case a health emergency occurs.

Plan Where You Will Live

Where you decide to retire will heavily affect your expenses after retirement. For example, if you live in a bigger home in a high-tax state, your expenses could decrease by moving to another state. If you love the state you reside in, it may be beneficial to downsize to a more financially manageable home.

Find out about assisted living, home care, and nursing home services in the area you want to live. Plan ahead in case your favorite option has a waiting list. Have conversations with your family about relocation or possible house-sharing.

Review Your Estate Plan

Thinking about your demise is not the happiest topic, but as you near retirement, it must be acknowledged. Having an estate plan will ensure your family is not inheriting a financial burden after you are gone. A living will, a trust, and a will should be included in this plan.

While creating a living will you need to choose a power of attorney and healthcare proxy to make decisions if you are incapable. You will need to establish guardians of living dependents and appoint beneficiaries on retirement accounts, insurance plans, and shared assets.

A trust utilizes a third party to keep assets for beneficiaries, making the distribution of your estate move along faster than a traditional will. You can also craft a letter explaining your desires for a funeral and dissemination of sentimentally valuable family heirlooms. Double-check that all documents are notarized and stored somewhere for safekeeping and include a list of personal data like your digital passwords to keep things organized and easy.

Investigate Retirement Investments

It is never a bad thing to have more than one source of income. A mistake to avoid is designing your portfolio around your retirement date. By doing this, you are leaving very little time for earning potential in your post-retirement life. There are many investment options available that can generate regular income, without having to go back to work, but it is important to carefully research each option before investing.

Aside from a 401K, consider getting an Individual Retirement Account (IRA). These accounts allow many taxpayers to put pre-tax money aside for retirement. There are two kinds of IRAs, traditional and Roth, which affect the tax treatment and value of your withdrawal.

Talk with a Financial Planner

You can spend a third or more of your life in retirement, so it is important to properly plan for it. However, to make the most of a financial advisor’s counsel and start planning effectively, you should talk to someone sooner rather than later. They will be able to set up financial plans that balance your needs and income and help you establish priorities.

Located in Truckee, CA, Pacific Crest Wealth Planning believes retirement & financial planning should be a highly personalized process. Effective planning may enable you to enjoy the freedom of your retirement years. Without it, it may take everything you have just to get by.  As a fiduciary when providing investment advice, we are obligated to put our client’s interest before our own.  Please feel free to contact one of our CERTIFIED FINANCIAL PLANNERTM practitioners at (530) 563-5250 or by email

This article is meant to be general in nature and should not be construed as investment or financial advice related to your personal situation.  Please consult your financial advisor prior to making financial decisions. 

John Manocchio (CA Insurance Lic#0H73423) is a Registered Representative and Investment Adviser Representative with/and offers securities and advisory services through Commonwealth Financial Network, Member FINRA/SIPC, a Registered Investment Adviser. Fixed insurance products and services offered through CES Insurance Agency.