Preparation Steps to Take As You Close In on Retirement

by Reader Contributors

Prep Steps to Take as You Close in on Retirement photo

Are you prepared for retirement, one of life’s biggest changes? Cover your bases by taking these preparation steps as you close in on retirement.

My husband and I are about three years from retiring. He will retire first and I will retire a year later. We’ve been so busy working and raising our kids (and sometimes our grandkids, too) that we haven’t given much thought to retirement. What should we be doing now that will help us prepare for retirement? Are there some financial decisions that we should be making now? We haven’t seriously considered downsizing, but I know that’s an issue. Is there anything that we should be doing with Social Security or Medicare? I don’t want to wake up three years from now and find out we missed some important decision points.


Do the Work and Then Relax

First, visit to learn more about benefits and rules. Then visit your local Social Security office to learn more about how to maximize your benefits. Delaying them if possible will make your later benefits higher.

But don’t delay Medicare benefits, for which you should sign up six months before you turn 65. Also, sign up right away for Medicare Part D unless you choose a Medicare Advantage plan that includes prescriptions or have an employer-based insurance plan that will continue in retirement. Any delay will cost you money every month for the remainder of your life. You may also want to start researching Medicare supplement plans if you choose original Medicare.

Schedule an appointment with your investment broker to discuss how to maximize your retirement income and keep your investments on track. Retirement investing goals may be different from retirement savings goals.

I found downsizing a great help because it made my life easier to have less “stuff” and less to clean. This has made my life much easier and more relaxed.

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Get Out of Debt Before Retiring

First and foremost, you should get out of debt completely. As for Social Security, you may or may not want to start it immediately upon retirement. If you don’t, you’ll need a pension and/or your own savings to live on until you do decide to start it. For Medicare, study up and decide whether you want to go the part C (Medicare Advantage) or B and supplement route. Part C is cheaper but severely limits the providers you can see. If you do not do part C, you can see any provider nationwide that accepts Medicare. Without Part C, you must sign up for a Part D (drugs) policy when you start Medicare. You also should sign up for a supplement. Initially, any insurance company must accept you. Any attempt to buy a supplement after initially starting Medicare is subject to denial for health reasons.
Jo Etta

7 Retirement Prep Steps

I cannot tell from your question what you have already done. Therefore, I am going to assume that you are avidly pursuing self-education on both the financial and social aspects of retirement. You really cannot prepare too much!

For me, these things were very helpful.

  1. I paid off everything (I didn’t owe anyone a dime).
  2. I started living on my retirement income years before I retired, using the book America’s Cheapest Family. Subsequently, I was already prepared when my state agency cut staff by 30%, focusing on older employees to be retired or fired to cut expenses. I had planned to work 14 more years.
  3. I focused on saving at least 30% of that retirement income for unexpected expenses, house repairs, and car replacement, and putting all extra funds into my Roth account and a secondary emergency fund.
  4. I projected my expenses out for ten years and included inflation, using an inflation calculator. These calculations showed that I could not remain where I was in eight years, due to property taxes going up 10% a year and the HOA fee going up 5% a year with unexpected special assessments.
  5. I sold my condo and bought a house in a less expensive area, which I paid off and repaired from the condo sale funds, putting the excess into mutual funds (with Vanguard online). This allows me to be in control of expenses and repairs.
  6. Budget some money for hobbies and interests.
  7. Finally, I stay flexible and make cuts and adjustments as the need arises.

Have a great retirement!

Convert to a Roth IRA

If you have much money in a 401k, make sure you convert it to a Roth IRA if it is a “regular” IRA now. Otherwise, you will be taxed on the minimum withdrawal requirement when you reach 70 1/2. I didn’t do that, so I suffer the consequences.

Reviewed June 2021

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Every Thursday we’ll send you articles and tips that will help you plan for and enjoy a comfortable retirement. Subscribers get a free copy of the After 50 Finances Pre-Retirement Checklist.

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