The journey toward your retirement finish line is an exciting time, filled with anticipation of your future life. While you may find yourself lost in fantasy about the freedom you will soon enjoy, here are a few assignments you should complete before you graduate to retired life.
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Practice your retirement budget. To make our nest eggs last throughout retirement, most of us will need to live within the confines of a budget. Sure, some expenses will go down in retirement. But it’s still a good idea to take your new budget for a test drive. If you are dependent on budget cuts in retirement, you’ll reduce the shock to your household if you start downsizing your spending before you retire.
Shop for health insurance. If you are retiring before you are eligible for Medicare, shop for health insurance now. While you can buy some time after you retire by electing COBRA coverage, it’s usually less expensive to obtain your own policy. This is not an easy assignment, so it’s best not to leave this one for the night before retirement.
Eliminate debt. If you are still making monthly payments on debt, you shouldn’t be retiring. It’s challenging enough to make sure your money lasts longer than you do. Don’t make it even harder by entering retirement burdened by debt.
Sock away even more for retirement. In the final push toward retirement, you’ll want to contribute the maximum to retirement plans while you still have the chance. I only worked a few months into the year before I retired, so I elected to have nearly all of my salary deferred to my 401(k) in order to reach the limit in the few months I had left. And because I only worked a partial year, my income was low enough to qualify me to fund my IRA and my spouse’s.
Leave your job on good terms. When I told my employer that I wanted to retire, I offered to stay as long as it would take to find and transition to my successor. That took nine months. Yes, I was anxious to get on with my life during those months, but leaving on good terms was even more important to me. Last week my ex-employer invited me to a retirement party for one of my former co-workers. I was delighted to be a part of the festivities and very thankful that I didn’t burn that bridge when I retired.
Plan your new identity. While the transition to retirement can be exciting, it’s also a little scary. Many people struggle with the loss of their work identities. It’s never too early to start shaping your new one. Explore your passions before you retire and you’ll make the transition easier.
Talk to your significant other. You are not the only one with a whole new life in front of you. Your spouse’s life is about to change dramatically too. My husband was retired for four years before I crashed his party. While your life together will continue to evolve over the coming years, it’s a good idea to start planning those years together before you ditch a job forever.
Sydney Lagier is a former certified public accountant. Since retiring in 2008 at the age of 44, she has been writing about the transition from productive member of society to gal of leisure at her blog, Retirement: A Full-Time Job.