Don’t Retire Until You Do These 10 Things

Dear Rich Lifer,

One of the worst times to retire is during a pandemic. 

So, it’s no surprise the National Institute on Retirement Security found that 50% of Americans are considering delaying retirement due to the pandemic.

Unfortunately, for many Americans, choosing to work longer is not always a choice they get to make.

Nearly two million older workers have left the labor force and will not be returning, says the Schwartz Center. There’d be more than 3 million more older workers still working today that aren’t, had the pandemic not happened.  

If you’re on the fence about retiring this year, or worried you might be forced into it, we have put together a pre-retirement checklist to help you decide if you’re really ready to make the big exit. 

The last thing you want is to feel regret about retiring in a hurry.

So read this list to avoid mistakes and reduce stress as you consider the next chapter…

  1. Do What You Want to Do Before You Go

This may seem like an odd first step, but it’s critical in having absolutely no regrets after you retire. 

If there’s a project you’ve wanted to work on or a goal you’ve wanted to achieve, don’t quit until you do it or are at least satisfied with the progress made. Stopping at the one-yard line will always leave you wondering what-if, and that’s no way to spend your golden years. 

Even if you’ve accomplished everything you have imagined you’d do and more, at least give yourself a good sendoff to really close this final loop in your journey.  

  1. Picture Your Perfect Retirement

While your retirement picture only exists in your mind at this point, it’s your crucial second step in planning for retirement. 

A clear picture of what your perfect retirement looks like is motivation to push you to finish those final projects you’re working on and make sure you’re ready for this next chapter. 

Ask yourself questions like: 

  • When do I want to retire? In one, two, or five years?
  • How do I want to retire? Start with part-time work? Stop all work?
  • Where do I want to retire? At home? Abroad? A mix of both?  
  • What are my retirement goals? Golf all day? Start a pet project? Travel the world?

Once you have a crystal clear picture of what your retirement should look like, think about how you’re going to fund it all. 

  1. Plan Your Retirement Budget

First ask, “How much will I need in retirement to live how I want to live?” 

There are many rules of thumb to meet your retirement income goals. There’s the 4% rule, there’s your annual income times 10 to 14 …  or you can simply take 70% of your annual pre-retirement income. 

At the end of the day, your income needs to sustain you in retirement depending on your retirement needs, wants, and goals. 

A good way to gauge how much you’ll need is to budget out what you expect your monthly income and expenses will be. Consider food, transportation, healthcare, hobbies, presents for your grandkids and kids, trips you plan to take, “toys” you want to buy, etc.  

Cost out all these items and figure out if your expected income matches these corresponding expenses. Can you realistically fund the lifestyle you have pictured in retirement? 

If the numbers look tight, you might need to consider working longer to save up more, or cutting out some expenses, maybe downsizing your home, or picking up part-time work to bridge the gap. You won’t know until you run through this exercise. 

  1. Eliminate As Much Debt As Needed

All debt is not bad. But there is certain debt that you’ll want to squash before you call it quits. Because your income is likely to decrease, any fixed payments will start to take up a larger share of your expenses. 

High-interest credit card debt should be taken care of first. If you have outstanding student loans, try and close those as well. An easy way to do this is to add a row in a spreadsheet for each debt, then next to each debt, add a column for interest rates and terms. 

Sort your debts by either high interest or outstanding balance (high-low, low-high). It doesn’t matter how you choose to tackle your debt, just make sure you’re putting a dent in the debts costing you the most while paying the monthly minimums on the others as well. 

The key is to be consistent. Map out your payments on a calendar and track your progress. With a looming retirement deadline, you’ll be surprised how quickly those debts disappear. 

  1. Review Your Investment Portfolio

Now you know roughly how much you’ll spend in retirement and if you’ll have any outstanding debts, like a mortgage payment, you need to organize your assets in a way that can satisfy these expenses over the long haul. 

Start thinking about your risk tolerance. Is your portfolio well-diversified? Are risks you were willing to take at age 30, 40, and 55, the same risks you’re willing to take now? Probably not, so what you need to sell and buy to manage your assets. 

Think about your investments’ time horizon too and the ability to recover from market downturns and outpace inflation. You need a mix of growth and safety assets.

Don’t forget to include property you own, vehicles, precious metals, cryptocurrency, and any other valuables that will contribute to your net worth. 

  1. Figure Out Health Insurance

According to the Bureau of Labor Statistics’ Consumer Expenditure Survey, healthcare costs account for an average of 11% – 15% of retirement spending, depending on the retiree’s age.

If you plan to retire at age 65, you can mostly rely on Medicare for your retirement needs. Check out the Medicare website for coverage details and costs. Pay close attention to anything you need that isn’t covered. 

If there’s something not covered, consider how you’re going to supplement it. And if you’re on track to retire early, your healthcare costs will be higher. If your former employer won’t cover you, see if you can stay covered through your spouse’s insurance plan. 

Whatever you decide, make sure healthcare is top of mind as you plan your exit strategy. Understand the terms and conditions of your coverage and how much you can expect to pay in premiums, deductibles, co-pays, and out-of-pocket costs.

  1. Understand Your Social Security Benefits 

When you decide to collect Social Security benefits can greatly impact how much you’ll receive. The earliest you can start collecting is at age 62. If you’re in average-to-good health, it’s best to hold off collecting Social Security at least until full retirement age at 66. 

If you haven’t familiarized yourself with the Social Security website, log in to your account at There are all kinds of resources you can check out to begin planning when is the best time to take your benefits. 

And if you plan to retire early, consider how you are going to fund this gap between now and when you become eligible to take benefits. Your 401(k) or IRA might have enough money to bridge the gap, but if it doesn’t, you’ll need to factor this in ahead of time. 

  1. Communicate Your Plan With Your Partner

If you have a spouse that’s working or planning to retire around the same time you are, it’s critical you communicate your plan with each other. 

Figure out the timing so you know how much income you’ll have coming in and when. Talk about how you both want to spend your days in retirement. Your interests and goals don’t have to line up perfectly but it’s important you know what your spouse’s ideal retirement looks like so you can plan together. 

Another problem retirees face is spending too much time together in retirement. Also, talk about how you’ll break up the time together. Will you join a racket club or golf course and be spending 3-4 hours there every week? Are you planning to go on regular hikes and bike rides? 

Setting expectations ahead of time and planning when you’ll be together and when you won’t is a good exercise and will go a long way in avoiding a gray divorce. 

  1. Don’t Forget Taxes

Nothing is certain in life except for death and taxes. Sadly, tax planning doesn’t end when you retire. The IRS still wants its cut of your retirement earnings. Even though you’ll likely be living on less in retirement, you’ll still have some taxes to pay. 

How much you owe will depend on a few factors like where you live, how much you withdraw from your retirement accounts, how much your investments make, etc. Keep these in the back of your mind as you’re planning your budget. A lot of soon-to-be retirees don’t realize that if they start collecting Social Security while still working, they may lose a significant portion of their benefit.

  1. Set a Specific Date 

The last step in our checklist is the most fun. After you’ve crossed off all the other items on your list, it’s now time to pull up your calendar and pencil in your final date. 

Set the specific date you wish to retire. This becomes the date you drive toward over the next year, two years… or whatever your retirement time frame looks like. 

If you’ve made it this far, give yourself a pat on the back and pour yourself a drink, you deserve it. Now keep the momentum going so you finish your career without any second thoughts. 

To a richer life,

The Rich Life Roadmap Team 

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