Getting ready for retirement does not mean being perched at some imaginary starting line on a running track. Retirement is a long process and so are the steps needed to prepare for it. However, according to research done by the MetLife Mature Market Institute, there are 15 tasks that, if done, are likely to put you in the fast lane when you do get on your retirement track.
One of the key problems with retirement planning is that people don't know where to start, says John Migliaccio, director of research for the institute. "With these 15 tasks they've got something specific, so if you start anywhere within this list, you're making progress."
[See Retired Workers Will Be Wooed to Return.] "As people get older and closer to retirement, they do tend to accomplish many of these things," he says. Doing so, "gives you more control over your own retirement." Moreover, Migliaccio says, research spanning nearly 20 years has shown remarkable consistency in how well people carry out these tasks, and the ages at which they do so. The deep recession did not change the research findings.
The 15 retirement readiness tasks identified by MetLife are broken into five categories:
1) Decided whether to fully retire, or to work part-time in retirement.
2) Formulated ideas about how much I’d like to work in retirement.
3) Determined which of my skills could be easily transferred to a new part-time job.
4) Explored what employment possibilities are available to me if I want to keep working full- or part-time in retirement.
5) Looked into alternate career or part-time work opportunities for myself in retirement.
Leisure & Activity
6) Determined the proper balance between work and leisure if forced to choose.
7) Identified my personal goals in retirement.
8) Considered the importance of relationships with co-workers when making a decision to retire.
9) Considered how the various aspects of my retirement might positively or negatively affect the relationships I have with my family and friends.
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Income & Benefits
10) Determined the steps necessary to receive company, government, or other benefits I’m entitled to in retirement.
11) Evaluated how changes in the economy will affect my pension, investments, and retirement benefits.
12) Assessed whether full-time retirement would be financially feasible for me at this point in my life.
13) Determined the factors which are critical to maintaining a personally satisfying retirement.
14) Developed an alternative plan that could get me through a considerable and unexpected setback in my retirement.
15) Evaluated whether my retirement plans meet the demands of personal, social, and financial changes.
Migliaccio says there's no weighting of the tasks. You need to do them all. "The most important tasks are the ones you haven't done" yet, he jokes. However, among equals, he says that when people decide to find out the details of their benefits (Task #10), they have crossed the threshold into serious retirement planning. "Once they get that in order, they're ready to go forward."
People who say they feel prepared for retirement had, on average, completed nine of the fifteen tasks. People who did not feel ready had done only three of the things on the list. Overall, about half of the people polled by the institute said they felt prepared for retirement, and half said they did not feel retirement ready.