Planning to Retire? Tips for a Smooth Transition

Insights | Planning to Retire? Tips for a Smooth Transition
Medicad | Horan

Author: Michael L. Hermes, CFA, CFP, Vice President, Wealth Advisor, HORAN Wealth Management

Thinking of retiring? Preparing for retirement can feel like a full-time job. Between social security, medicare, pensions and investments, insurance, etc., your financial considerations can be overwhelming. One of the most exciting times of your life shouldn't also be one of the most stressful. Consider this roadmap for success when planning for your retirement:

1. 12-Months Before Retirement (At least)

  • Meet with a financial advisor to set appropriate expectations around retirement income, personal investment strategy, and plans for your estate, insurance, and social security. This will help you obtain a firm grasp on your final retirement date.
  • Create a retirement budget: Certain expenses may change in retirement, and you want to be prepared. For example, most retirees spend less on gas a year as they no longer commute to work. In addition, health insurance/Medicare premiums may be drastically different than the current rate.
  • Implement a plan to pay down any residual debt your may have. You will be able to sleep better at night knowing you don't have that lingering credit card bill or car payment hanging over your head. 

2. 6-Months Before Retirement

  • Health Insurance/Medicare: Meet with an individual health insurance broker who can educate you about the process of enrolling onto Medicare along with the purchase of a Medicare Supplement/Advantage Plan and Drug Plan. Typical Medicare costs can range from $170 per month per person to $350 per month per person, depending upon the plan you choose. 
    • Note: If you are not yet 65, they can help with obtaining individual coverage as well, such as shopping for a plan in a market or enrolling into COBRA. 
  • Contact human resources at your place of employment to notify them of your plans. Obtain and complete any necessary pension/retirement and/or health insurance paperwork. 

3. 3-Months Before Retirement

  • Work with your health insurance broker to enroll into a Medicare/health insurance plan.
  • Work with your financial advisor to file for your social security benefits (assuming you would like to being collecting benefits at retirement).

4. Post-Retirement - After Receipt of Last Paycheck

  • Speak with your advisor about the pros and cons of consolidating your retirement accounts to make management of your investments and estate easier and starting income from your investments.

5. Shortly After Retirement (Or Ideally Any Time Before)

  • Work with your advisor and a qualified estate attorney to update your estate plan including (but not limited to) your will, living will, health care power of attorney, and durable financial power of attorney. In addition, consider establishing a revocable trust to protect your assets after your passing. 
  • Work with your advisor to review your insurance needs. This may include cancelling unnecessary life insurance policies and/or purchasing long-term care policy to protect your estate and your estate and provide greater access to care. 

Retirement is one of life's greatest rewards after years of hard work, and it should be a smooth transition. If you need assistance, contact your HORAN Advisor to discuss your options via a complementary consultation. 


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