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#6 GO FOR A TEST DRIVE
Live on your expected retirement income for 6 months prior to retirement. Is it reasonable or do you feel pinched all the time? Better to find out while you still have a job.
#7 DON’T FORGET TO PLAN FOR BIG-TICKET ITEMS
In the first few years of retirement (the “go-go years” as opposed to the “slow-go years” and the “no-go years”), you will probably want to spend your money on experiences, many of which may be expensive but can be easily foreseen and budgeted for. You want to avoid spending your now-limited income on expen- sive, unforeseen large-ticket items.
ARE YOUR CARS RELATIVELY NEW?
You don’t want to have to purchase one, much less two, new cars in the first few years of retirement. In fact, if you don’t drive much, you may find that a car purchased just before retirement is still in your driveway when your daughter finally takes your keys away.
DO YOU NEED TOYS FOR YOUR RETIREMENT?
ARE THE KIDS ALREADY MARRIED AND THROUGH SCHOOL?
If not, do you have money put away that you plan to use to help them with wedding or schooling costs?
#8 ESTATE PLAN
Estate planning is always important, but even more so the closer you get to your own life expectancy.
ARE YOUR WILL AND TRUST UPDATED?
You probably should have a will and a revocable trust before getting to retirement, but at this point you can make a much more educated decision about any serious estate planning you may need to do.
It is also a lot easier at age 60 than it was at age 40 to decide where the money you don’t spend in retire- ment should go upon your death.
DO YOU NEED TO START GIVING MONEY AWAY EARLY TO AVOID ESTATE TAXES?
By retirement, you should have a good idea if you’re going to have an estate tax problem. Remember, your state exemption limit may be much lower than the 2014 federal exemption of $5.34 million ($10.68 million for couples).
CONCLUSION
Just like a pilot runs through a pre-flight checklist, be sure you run through a pre-retirement financial checklist like this one either on your own or with a good financial planner before embarking on this new adventure.
If your retirement plan includes living on a sailboat in the Caribbean or a luxury motor home, purchase it (with cash) before you retire.
DOES YOUR HOME HAVE DEFERRED MAINTENANCE?
Don’t go into retirement living in a home in which you know you’ll have to replace the windows, the roof, the carpet, or even the washing machine any time soon. Do that while you still have a working income.
JUNE/JULY 2021 | WWW.OCMS-MI.ORG
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