Retirement checklist: 6 steps to plan for life after work

September 29, 2023

Financial planning is crucial, but where should you begin? You can start right here, with our six-step retirement checklist.

Use our retirement checklist to plan your best retirement.

Are you wondering how to plan for retirement? Maybe your retirement is a hazy goal, far off in the distance. Maybe it’s a prospect looming just around the corner. Either way, it’s never too soon to get your financial house in order for the big day when you begin to enjoy life after work.

Financial planning is crucial, but where should you begin? You can start right here with our six-step retirement checklist.

#1: Envision and determine your goals. You’ll certainly want to anticipate everyday living expenses, which you can get some idea of by looking at your current budget. But maybe in retirement, you want to travel the world, move closer to the kids or to a better climate, or just keep things as they are as long as your health permits. You might also wish to take up new hobbies and leave a legacy for your family members and favored charities.

Understanding your retirement goals and the financial resources you’ll need to meet them informs the rest of your plan. Categorize these goals as either needs – such as housing and healthcare – or desires such as travel. It will help ensure that you prioritize funding for the essentials.

#2: Inventory your assets and liabilities. When you’re wondering, “How to plan for retirement,” you need to know where you are before you can decide how to get where you’re going.

Look at your current lifestyle, debt, savings, income stream(s), insurance policies, real estate, investments, annuities, and even high-value personal items. Which of your assets will deliver continuing income and which can be liquidated (either at once or over time)? On the liability side, consider all continuing financial obligations, such as mortgage or divorce payments and taking care of children or parents. Create a spreadsheet so you can track all significant items at a glance and update them easily as circumstances warrant.

#3: Create an income strategy. When you know what you have, what you need, and what you want, you’re ready to develop an income strategy to close any gaps. Consider the following:

  • Thinking about when to take Social Security; if you qualify, you can generally claim it at age 62, but waiting, up to age 70, can mean higher monthly checks
  • Delaying your retirement if you need more time to save and invest
  • Making “catch-up” payments to a retirement account if you qualify
  • Taking a part-time job or starting a part-time business (such as tutoring)
  • Including both growth and income realization as investment goals; the first helps to ensure that you’ll have money for the long term, and the latter helps pay current expenses
  • Considering purchasing an annuity to supplement other guaranteed income sources

#4: Pay down your debt. What debts do you have? Credit cards? Car loans? Still paying off a mortgage? If debts worry you now, the bad news is that they might become an even bigger headache in retirement. That’s because many people have less money to spend – including on debt repayment – after they retire.

 So, fixed debts become a bigger part of their monthly spending. The best course of action is often to pay down as much of one’s current debt now, before retirement. If you can’t clear them all, you might start with the highest-interest debts, possibly including credit cards, since they can cost you the most. Others attack smaller accounts first, so they can clear them entirely from their tracking spreadsheet.

#5: Create an emergency fund. Yes, this is a key piece of your retirement checklist. What’s your strategy if things don’t go according to plan? What if the income you’re depending on is delayed or diminishes? What if you’re suddenly faced with a personal disaster or family crisis?

It’s generally a good idea to have an emergency fund, apart from any considerations of retirement. But it’s often more important to have that fund going into retirement, when your income and workaround options both may be more limited. How much is enough for an emergency fund? You might look at your expenses and save enough to cover at least three months. Many people choose six months as a target for savings, and some save even more.

#6: Plan for healthcare. Healthcare is among the biggest concerns of most people heading into retirementMedicare covers a lot of healthcare expenses, but not everything. You may also want to consider options including supplements such as Medicare Advantage plans, as well as long-term care insurance, health savings accounts, and the health insurance of a working spouse.

What can you check off your list?

To help you kick off your retirement checklist, Jackson offers the Retirement Expense & Income Calculator. Use it to calculate any potential gap between essential expenses and guaranteed income, and to begin to consider proposed ways to address a shortfall. It’s also a great tool to review together with your financial planning professional.

Annuities are long-term, tax-deferred vehicles designed for retirement. Variable annuities involve investment risk and may lose value. Earnings are taxable as ordinary income when distributed. Individuals may be subject to a 10% additional tax for withdrawals before age 59½ unless an exception to the tax is met.

Before investing, investors should carefully consider the investment objectives, risks, charges, and expenses of the variable annuity and its underlying investment options. The current contract prospectus and underlying fund prospectuses provide this and other important information. Please contact your financial professional or the Company to obtain the prospectuses. Please read the prospectuses carefully before investing or sending money.

Jackson, its distributors, and their respective representatives do not provide tax, accounting, or legal advice. Any tax statements contained herein were not intended or written to be used and cannot be used for the purpose of avoiding U.S. federal, state, or local tax penalties. Tax laws are complicated and subject to change. Tax results may depend on each taxpayer’s individual set of facts and circumstances. You should rely on your own independent advisors as to any tax, accounting, or legal statements made herein.

Annuities are issued by Jackson National Life Insurance Company® (Home Office: Lansing, Michigan) and in New York, by Jackson National Life Insurance Company of New York® (Home Office: Purchase, New York).  Annuities are distributed by Jackson National Life Distributors LLC, member FINRA. These contracts have limitations and restrictions. Jackson issues other annuities with similar features, benefits, limitations, and charges. Contact Jackson for more information.

Jackson® is the marketing name for Jackson Financial Inc., Jackson National Life Insurance Company®,  and Jackson National Life Insurance Company of New York®. Jackson National Life Distributors LLC.