Five Year Pre Retirement Plan

Ann Tergesen (of the Wall Street Journal) provided a Five Year Pre-Retirement plan. Ann was ably advised by Associate Professor Deena Katz (Texas Tech University).   Here is a capsulized overview:

FIVE YEARS before retirement

Lifestyle-Start thinking about how you, and your spouse/partner would like to spend time. Identify your interests, hobbies, community volunteering, church, travel, and general activities.

Finances-have you saved enough? Develop a budget. What costs will you avoid in retirement, and what costs will increase (health care will likely increase).    Do you still need the cash value or term life insurance policies you have?

FOUR YEARS before retirement

Lifestyle-consider relocating after serious dialogue with your spouse/partner.  Do you think proximity to children, friends, church, climate are important?

Finances-Investigate Social Security and Medicare. Seek out a financial advisor (we are here to assist you with this education and advisory effort).

THREE YEARS before retirement

Lifestyle-if relocation is possible, visit new locations at various times of the year.  Is downsizing more appropriate than relocation?  Begin to transfer household items, heirlooms to facilitate the downsizing process.

Finances-prepare a budget of relocation costs, and determine what health coverage plan is available if relocating.

TWO YEARS before retirement

Lifestyle-Is part time work necessary? Is additional job training necessary to pursue that new part-time career? What networking opportunities will facilitate the transition to more volunteering? What realignment in activities, service organizations, and social clubs is necessary?

Finances-Is a reduced work schedule possible in your current position? Is health or care giving an issue in balancing work and personal life.  How is the current financial market(s) in relation to your assets held?  What are the market prospects for the foreseeable future?  A critical analysis is necessary to determine if you could outlive your assets.

ONE YEAR before retirement

Lifestyle-Develop a relocation plan, and detail the steps necessary to make the relocation effort successful. Develop a detailed downsizing plan if downsizing is important.  Will you need to care for relatives – grandchildren, parents, special needs children?

Finances-consider streamlining accounts, and have access to necessary cash, liquid assets for relocation/downsizing efforts.  Discuss your finances further with our firm, and determine if a systematic distribution or monthly withdrawal process should be created.

Health care-firm up arrangements, make sure Medicare and/or COBRA arrangements are thoroughly understood.