The Pre-Retirement Checklist: 10 Tips Before Making the Retirement Leap

Retiring is exciting, but most retirees are woefully unprepared for all the changes.  Excluding the question of “How much do I need to retire?”, there are still a long list of daunting questions and tasks to tackle before making the retirement leap.
1. Reassess Your Real Estate
While we have an entire article about common real estate pitfalls for retirees, here are a few quick points.  First, many retirees spend far longer than they should in the larger, costlier, higher-maintenance homes where they raised their children.  When your children leave the nest, consider downsizing to a less expensive, low- or no-maintenance apartment or condominium.  The financial savings can be invested where it can earn you extra income each month, and while that high-maintenance house may be in good condition now, waiting until you are unhealthy before selling means letting the maintenance slip, and a lower sales price.  Lastly, consider locations within easy walking or biking distance to amenities you’ll often use, such as groceries, restaurants and entertainment.
2. Reassess Your Transportation
No one is taking the keys away.  But walking and/or biking whenever possible offers a number of benefits to retirees, especially in reduced costs.  From saving money on gas, to selling your car entirely and using car-share services when you need a car, to lower insurance costs, to forgetting maintenance headaches, you can save a massive amount of money every year by getting rid of your car (or even just sharing one car with your spouse).  Other benefits include exercise, safety, avoiding the DMV and never having to hear your children give you a hard time about driving.
3. Know How You Will Spend Your Days
Sure, the idea of relaxing by the fireplace may sound perfect, but it’s not a viable way to spend your days.  First, consider a part-time (or even full-time) “retirement career”.  What did you want to do for a living when you were 20, before you realized that it didn’t pay well?  Or, what might someone pay you to do that you like anyway?  Maybe you could work in a winery, pouring and discussing wines with visitors.  Or maybe you could work at a natural history museum, telling visiting children about the five mass extinctions.  Another possibility is volunteering for a local non-profit, or passing along your expertise by teaching a weekly course at a local college or trade school.  
Consider long and hard the question “When I’m no longer a _______, who and what will I be?”  Many of us largely identify ourselves through our careers, whether consciously or not.  Considering this before you retire is more important than most pre-retirees think.  
4. Remember Vesting and Minimum Retirement Account Distributions
Some 401(k) accounts require that you are “vested” before paying full benefits – double check with your employer that you have spent enough time employed to be fully vested, before announcing your retirement.
On the other side of the spectrum, the government will fine you if wait too long before drawing down your retirement accounts.  By age 70½, you must start taking distributions from IRA and 401(k) accounts.
5. Consider Carefully When to Start Drawing Social Security
At age 62, Americans become eligible for minimum Social Security benefits.  The longer you wait, however, the larger the Social Security checks become, up to age 70.  If you scoffed at the idea of retiring only to keep working another job in #3 above, reconsider if you’re younger than 70; that extra income can pay huge dividends if it means delaying Social Security benefits.
6. Adopt a Strict Budget
You should have one of these already, but be that as it may, retirement is no time for flights of fancy in spending.  Sit down with a personal finance expert and map out a strict budget, outlining every cost category from housing to transportation to entertainment, and stick to it.  Feel free to adjust your budget as you must, but if you spend too quickly and draw on your nest egg too much, it may mean that another job is in the cards.
Retirement Planning Tips7. Talk to Your Spouse about Expectations
Many couples struggle when one or both spouses retire, because they are not accustomed to all the time at home together.  Many spouses also have different visions in mind for how retirement will look, so sit down with your spouse and have an extremely frank conversation about what each of you envisions and your expectations.
8. Beware of Social Isolation
Many people get the bulk of their social interaction through their career, whether directly at work or indirectly through off-hour social activities like happy hour after work.  There will be a gaping social vacuum in your life, and you need to think carefully about how you’ll fill it.  Your spouse and children can’t be your only human contact, so consider joining social organizations, starting new interest groups or coordinating more social activities among your friends and (soon-to-be-ex-) colleagues.
9. Update Your Will or Living Trust
You need to update your will document or living trust every year or two, to accommodate changes in assets, real estate, children, grandchildren, etc.  Remember that health- and estate planning documents are only valuable if other people know how to access them, so consider storing them in your Estate Vault and sharing access with others.  Retirement is an excellent time to update your inheritance/will documents and put your legal house in order.
10. Reassess Your Health Insurance
Perhaps you have health insurance through your job, or perhaps you have high-deductible health insurance more appropriate to a younger adult, but retirement is a critical time to re-evaluate your health insurance.  While most adults maintain stable health until their late 50s, age-related diseases and conditions start lurching upward as adults enter their 60s, so it’s more important than ever to make sure you have adequate health insurance.  While some retirees rely on Medicare, it has its limitations, and you may prefer more comprehensive health coverage.  Like your last will, you should share access to your health insurance information and advance health directive/living will, in case something happens to you and your loved ones need access to them.
Retirement is not a time to withdraw, but a time to emerge.  Brainstorm fun ways to spend your golden years, from teaching to volunteering to working fun jobs to learning new skills.  Continual education will keep you sharper than ever, so even as you teach others the skills you’ve mastered over the decades, take the time to learn new technologies, new languages, new skills, new hobbies.
After all, you will certainly have plenty of time on your hands, so use it to actively engage with the world around you, and remember that retirement is supposed to be fun!