Preparing for Retirement: Planning Your Career Exit

Edward Goldstein |

This is it. You’re zeroing in on your retirement years. You’ve been planning this for decades, but are you really ready? If you’re five to 10 years away from retirement, it’s time to start getting specific about your plans after exiting your career. Here’s what you should be doing to prepare. 

Invest Appropriately and Cut Down Debt 

As you begin to see the retirement goal line in front of you, many believe that the most important things to do for your financial health at this point in your life is wherever possible, maximize your 401(k), IRA, or other retirement plan contributions and invest for growth.  However, that is not always the best decision.  It is also important to evaluate how all your investments are working together by looking at the "big picture" considering such items as the overall risk level of ALL of your portfolio assets and building a strategy for taking future distributions that considers how to minimize future tax considerations.

On the other side, debt is likely the last thing that you want hanging over your head in retirement.  So based on your circumstances, you should seriously evaluate paying off high-interest loans and credit cards first and foremost, even if it means not maximizing your retirement plan contributions for the time being.   Once your highest-interest debts are paid off, then, depending on your situation savings, you should evaluate whether it would be most advantageous to start contributing more to your retirement plan, paying off any other low-interest debt or building up your non-retirement savings.. For most, it can be a daunting decision which is something I can undoubtedly assist you with.

Determine a Retirement Budget 

By this point in your life, you probably have a good idea of the level of income that makes you most comfortable. While your income might decrease in retirement, it’s important to start thinking about your lifestyle and expenses now, so you can properly plan for the funds that you’ll need to stay financially secure. 

Be specific about your budget. Will you have mortgage or rent payments to make? What will the cost of living look like in your location, or are you planning to move in retirement? Are there future large ticket items such as home repairs, new car, family support to account for, and of course, future medical expenses! Are there unnecessary expenses that you can cut, if need be? Homing in on these details will make it easier for you to set and reach retirement savings goals before you get here. 

Set Goals 

Consider some of the life goals that you’d like to achieve in retirement. Are there destinations you’d like to visit or large purchases you will or need to make? These are things that should be built into your budget and set as specific savings goals. Over the next five to 10 years, you can continue to build your retirement nest egg while also saving for the things that you haven’t been able to do while working a full-time job. 

Establish a Legacy Plan 

Planning your budget and goals during pre-retirement also provides a good opportunity to start your legacy plan. This means planning how to distribute your property and assets to your loved ones after your death. Start by creating a list of your assets and where they’re kept—this can include things like investment accounts, real estate, and insurance policies. 

Once you have your list of assets, you should think about who you want to leave them to, or if there’s anything you want to donate to charity. Also, think about any preferences you have for medical care to record in an advance directive.

Lastly, as if retirement planning wasn't dauting enough, as a CFP and Client Fiduciary, I can walk you through the steps of establishing your financial and legacy planning. 

To explore options for your situation, reach out using the “Click for a Free Consultation” button. 
Edward C. Goldstein, CFP®, MBA, President
Financial Life Planning, LLC
10,000 Lincoln Dr. East, Suite 201
Marlton, NJ  08053
Phone: 856-988-5480
Fax: 908-292-1040

*This content is developed from sources believed to be providing accurate information. The information provided is not written or intended as tax or legal advice and may not be relied on for purposes of avoiding any Federal tax penalties. Individuals are encouraged to seek advice from their own tax or legal counsel. Individuals involved in the estate planning process should work with an estate planning team, including their own personal legal or tax counsel. Neither the information presented nor any opinion expressed constitutes a representation by us of a specific investment or the purchase or sale of any securities. Asset allocation and diversification do not ensure a profit or protect against loss in declining markets.