Countdown to Retirement: Timing Is Everything

Whether you’re decades away or counting down the years, hitting specific financial checkpoints at different stages will help ensure a smoother transition into retirement. Here’s a quick, decade-by-decade guide to help you stay on track.

YOUR 50s: Now is the decade to assess where you stand financially and determine what adjustments are necessary to meet your goals.

• Help Maximize Your Retirement Contributions: Take full advantage of catch-up provisions for 401(k)s and IRAs once you’re 50 or older. These allow you to contribute more than the standard limits, giving you extra space to boost your savings.

• Evaluate Health Insurance: Start thinking about how you’ll handle health care costs in retirement and identify any potential gaps before you become eligible or Medicare at 65. Research long-term care insurance into your tax strategy.

• Evaluate Health Insurance: Start thinking about how you’ll handle health care costs in retirement and identify any potential gaps before you become eligible or Medicare at 65. Research long-term care insurance into your tax strategy.

• Check Your Social Security Projections: Use the Social Security Administration’s tools to review your future benefits. This helps you plan and decide whether delaying claims would benefit you financially.

• Draft a Preliminary Retirement Budget: Estimate your future living expenses, accounting for inflation, health care and leisure activities like travel or hobbies.

YOUR 60s: Decide when you’d like to retire and create a clear plan for switching from saving to spending.

•Make Social Security Decisions: You can start collecting benefits as early as 62, but waiting until your full retirement age (or even 70) results in higher monthly payouts. Consider the long-term trade-offs before claiming early.

• Enroll in Medicare: At 65, you’re eligible for Medicare. Missing your enrollment window can lead to permanent penalties, so mark your calendar and investigate supplemental plans like Medigap or Medicare Advantage.

• Create a Retirement Withdrawal Strategy: Shift your focus from accumulating savings to managing withdrawals. Consider strategies like the bucket approach (dividing assets into short- mid- and long-term categories).

• Reassess Your Investment Portfolio: Adjust your portfolio to minimize risk while maintaining enough growth to offset inflation and fund your retirement for decades.

• Plan for Unpredictability: Include contingency plans for medical emergencies, market downturns or living beyond your projected lifespan.

BEYOND THE 60s: Retirement isn’t static – it evolves. Stay flexible and be prepared to adapt as your expenses or needs change.

• Start Required Minimum Distributions (RMDs): The IRS requires retirees to take RMDs from most retirement accounts by age 73. Plan ahead to ensure these withdrawals fit into your tax strategy.

• Focus on Longevity Planning: Retirees are living longer than ever. Stretch your savings with conservative withdrawal rates, guaranteed income options like annuities or low-risk investments.

• Optimize Legacy Planning: Consider tax-efficient strategies like gifting assets to loved ones during your lifetime or using qualified charitable distributions (QCDs) from your IRA to fulfill philanthropic goals.

ACROSS ALL DECADES: No matter your stage of life, there are some constant rules to follow when planning for retirement. Stay engaged through continued financial literacy. Laws, tax rules and retirement account regulations can change, so staying informed is essential. Remember, you can always reach out with any questions.