When and how to retire may be one the largest financial decision you will make. This generates many new financial questions you may not have dealt with before:

• Where will my income come from?
• Have I saved enough?
• When should I draw Social Security?
• What should I do with my pension and retirement accounts?
• How much will healthcare cost?
• How do I avoid a big tax bill?

I get these questions so frequently I decided to create a guide to help our healthcare workers answer these questions and more as retirement approaches.

When should I retire?

You should retire when you meet the following criteria:

1. You have sufficient assets to support your desired lifestyle without a paycheck.

2. You no longer desire to work.

It sounds simple – yet many of the people I talk to about retirement do not follow this simple rule. The result is:

1. Working longer than you needed to.
2. Being forced to cut back on your spending in retirement.
3. Being forced to go back to work after you retired.

This can all be avoided with a little planning. The problem is, too many people rely on Social Security’s “retirement age” to decide when they can retire. You don’t need to retire when the government says you have reached a magic age. Rather, you should retire on your terms based on your own financial situation.

Retirement Readiness Checklist

There are 6 key areas of your financial life to address before you retire to help you plan your optimal time. If you are planning to retire within the next few years, carefully review the resources and free guides in each section below as you develop your retirement plan.

Pension

• • Decide if you will take a lump sum or monthly payment [Download the free guide]
  • Create an investment plan if you choose to take a lump sum.
  • Beware: Many financial advisors will recommend you take a lump sum and buy an annuity from them. This could be a huge mistake. Carefully analyze the contract before you choose to buy a 3^rd party annuity from a commission based salesperson. Get a 2^nd opinion from a fee-only financial planner before you decide to take a lump sum from your pension.

Investments

• • Organize all areas of your finances.
  • If you choose to keep your 403(b) plan where it is, have an investment and income plan ready to implement.
  • If you choose to rollover your 403(b) to an IRA, consider fund costs and other fees before moving the account (you can’t move it back).
  • Consider reducing the investment risk in your portfolio as you approach retirement.

Social Security

• • Plan when you will begin taking Social Security based on your income needs, taxes, and potential longevity.
  • Taking Social Security at your full retirement age or as soon you retire may not be the optimal strategy for you. You can expect about an 8% increase in benefits for each year you delay benefits. The longer you live, the more delaying Social Security may pay off.
  • Do not begin Social Security retirement benefits if you are still working until after your Full Retirement Age (FRA) unless you have special circumstances.

Tax planning

• • Consider Roth conversions to reduce your future Required Minimum Distributions (RMD). [Download the free guide]
  • If you have both traditional and Roth accounts, consider your current and future tax brackets when deciding which account to withdraw income from.
  • Check if the IRMAA surcharge will affect your Social Security benefit. Strategize your withdrawals and taxes accordingly. [Download the free guide]

Healthcare/benefits

• • Plan what health insurance you will use after retirement [Download the free guide]
  • You will lose employer provided vision, dental, life insurance, long term disability insurance, and potentially other benefits. If you still require these benefits, consider purchasing private policies.

Retirement income

• • Set up your emergency fund and identify fixed monthly expenses.
  • Identify other financial goals (grandkids, travel, gifts, etc.)
  • Create plan to generate income to meet monthly expenses + financial goals from Social Security, pensions, investments and other income.
  • Remember to be aware of tax implications. Some of your retirement benefits will be taxable when withdrawn.

Once you have a written financial plan that addresses all 6 of these topics – you can begin to set your retirement date. Congratulations!

To stay informed and get access to the full library of resources, including flowcharts to help you make decisions around each of these topics, complete the form below.

If you could use some help getting started, you can schedule your complimentary retirement readiness check today.

Disclosure: This is intended for educational purposes only and not as specific investment advice. Consult with a qualified financial or tax professional that considers your entire picture before making changes to your finances.