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Your Retirement Checklist – Babylon Wealth Management

A happy and financially secure retirement is a primary goal for many working Americans. I’ve put together a retirement checklist to help you walk through the complicated path of retirement planning. For my readers who are serious about their retirement planning, follow these 12 steps to streamline and simplify your planning process. My 12-Step Retirement Checklist can be a practical roadmap, regardless of the age at which you want to retire. Following these steps will ensure that you review all aspects of your life and how they may affect your decisions before and during your retirement. Here’s an important retirement checklist of everything you need to do to prepare for the next chapter in your life.

1. know what you have

You worked very hard for this moment. You have earned and saved during your entire career. Now is the time to reap the benefits of your hard work. The first step in your retirement checklist is to understand what you have. Don’t guess. Do not believe You need to thoroughly evaluate all of your assets, real estate, businesses and retirement savings. Whatever you have accumulated during your working years can play an important role in your successful retirement.

2. Gather all your financial documents

In the second step of your retirement checklist, you need to collect all the relevant documents that show the ownership of your assets – financial statements, trust documents, wills, estate deeds. This would be an excellent opportunity to collect all your plan details from old 401k and retirement plans. If you are a real estate owner, make sure you have all your functions. If you are a beneficiary of a trust, collect all trust documents. View all your bank, savings account and social security details. Make sure you build a complete picture of your financial life.

3. pay off your debt

One of your main pre-retirement goals is to be debt free. If you’re still paying off your mortgage, student loans, personal loans or credit card debt, now is a good time to review your finances and come up with a payment plan that will help you pay off your debt and help you get more money. Will help improve retirement prospects.

4. create an emergency fund

The emergency fund is your rainy day money. This is money that covers unforeseen expenses. Hence, you do not need to reduce your regular monthly budget. This is money that will help you if you unexpectedly lose your job or are otherwise unable to earn money. I recommend keeping at least six months’ worth of living expenses in a separate savings account. Ideally, you should have built up your emergency fund long before you decided to retire. If you haven’t started yet, it’s never too late to make one. You can set aside a certain percentage of your monthly income to fill the emergency fund until you reach a comfortable level.

5. Know Your Employee Benefits

Sometimes employers offer generous retirement benefits to attract and retain top talent. Many companies and public institutions offer 401k contribution matching, profit sharing or pensions. Some employers may also offer certain retirement health care benefits. If you’re lucky enough to work for these companies and public organizations, know your benefits package. Make sure you are taking full advantage of your employee benefits. Don’t leave any free money on the table.

6. secure health insurance

A retired couple will spend an average of $285,000 on health-related expenses during their retirement. This cost is only rising at a faster rate than regular inflation. Even if you are in good health, healthcare will be one of your biggest expenses after you retire.

Medicare Part A and Part B cover only a portion of your health care costs, including impatient and hospital care. These include long-term care, dental care, eye exams, dentures, cosmetic surgery, acupuncture, hearing aids and exams, not routine foot care. You will be responsible for paying out-of-pocket for Medicare Part D through your personal Medicare Advantage insurance. Medicare Advantage is a “bundle” plan that includes Medicare Part A (hospital insurance) and Medicare Part B (medical insurance), and usually Medicare Prescription Drugs (Part D).

7. maximize your savings

Unless you have a generous pension, you will have to rely on your retirement savings to support yourself during retirement. Your 401k and IRA will likely be your primary retirement income source. So even though you may have supported your retirement savings, now is a good time to calculate whether your accumulated savings can support you during retirement. To boost your confidence, maximize your retirement contributions to 401k plans, IRAs, and even taxable investment accounts. Once you reach 50, 401k and IRA plans will allow for additional catch-up contributions.

There’s another compelling reason to save in tax-deferred retirement accounts. If you are in the prime period of your earnings, you are probably in a very high tax bracket. Maximizing your tax-deferred retirement contributions will reduce your tax bill for the year. you can withdraw your money

8. Prepare your estate plan

Estate planning is the process of handing over to the trustee and beneficiaries, writing a will, granting power of attorney and giving health instructions. The estate plan will guarantee that your wishes will be fulfilled, and that your loved ones are taken care of if you die or become disabled. Creating a trust will ensure that your beneficiaries avoid lengthy, costly and public probate. Update your beneficiaries across all your retirement accounts.

Estate planning is never a pleasant topic or an ice-breaking conversation. The sooner you accomplish this, the sooner your life will move forward.

9. set your budget

Budgeting is an important step in your retirement checklist. Once you retire, you may no longer earn a salary, but you will still have monthly expenses. Retirement will give you the opportunity to do things you didn’t have time for before. Some people like to travel. Some may take up a hobby or follow a charitable cause. Others may decide to help grandchildren. You can choose to buy a house and live close to your children. Whatever lifestyle you choose, you need to make sure that your budget can support it.

10. Build a Social Security and Retirement Income Strategy

The most important step on your retirement checklist is creating your income strategy. This is the part where you may need the help of a financial planner to help you make the most of your retirement savings and Social Security benefits. Your retirement income strategy should be tailored to your specific needs, lifestyle, type of savings and the diversity of your assets.

1 1 devise a tax strategy

Even if you are retired, you still have to pay taxes. Up to 85% of your Social Security benefits may be taxable. All your distributions from your 401k plan and traditional IRA will be subject to federal and state tax. All your dividends and interest in your investment and savings accounts are also taxable.

Only, distributions from Roth IRAs are not taxable. As long as your Roth IRA has been open for more than five years and you are 59 or older, your withdrawals from a Roth IRA will be tax-free.

Ask your financial advisor to devise a tax strategy that will reduce your tax payments in the long run. Find out if a Roth conversion makes sense to you.

12. set your retirement goals

Retirement opens another chapter in your life. The people who enjoy their retirement the most are the ones who have retirement goals. Find out what makes you happy and follow your passion. Your retirement will give you a chance to make up for everything that you lost during your career.

last word

Navigating through your retirement checklist will be a reflection of your life, career, assets and family. No one has the same retirement plan. Everyone’s situation is unique and different. Follow these simple 12 steps so you can enjoy and better prepare for your retirement. to be active Don’t wait till the last minute for important financial decisions. Make well-informed choices so that you can stay ahead of life’s events and enjoy your retirement to the fullest.

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