After years of saving and planning, retirement is finally on the horizon. The final six months before your retirement date often shift your focus from long-term planning to putting important decisions into action.
While everyone's retirement looks different, taking time to review key financial and personal decisions before your last day of work can help you begin this next chapter with greater clarity and organization.
1. Revisit Your Retirement Income Plan
Retirement often means transitioning from earning a paycheck to drawing income from multiple sources. Before you retire, review where your income will come from, such as:
- Social Security
- Retirement accounts
- Pension benefits (if applicable)
- Taxable investment accounts
- Cash reserves
Understanding how these sources may work together can help you identify questions to discuss with your financial and tax professionals.
2. Review Your Investment Allocation
Your investment strategy may change over time as your goals, time horizon, and risk tolerance evolve.
The months leading up to retirement can be an appropriate time to review whether your portfolio still aligns with your current objectives. While many investors shift toward a greater focus on income and managing volatility, there is no one-size-fits-all approach.
3. Think Through Your Withdrawal Strategy
The order in which retirement assets are accessed may have tax and cash flow implications.
Questions to consider include:
- Which accounts might you draw from first?
- How could withdrawals affect your taxable income?
- How might future required minimum distributions (RMDs) fit into your long-term plan?
- Should you maintain a cash reserve for unexpected expenses?
These decisions often work best when considered as part of your overall financial picture.
4. Review Healthcare Coverage
Healthcare is one of the most important planning considerations during retirement.
If you're retiring before becoming eligible for Medicare, review your available coverage options well before your retirement date. If you're approaching Medicare eligibility, take time to understand enrollment timelines and evaluate which coverage options fit your needs.
Planning ahead may help reduce last-minute decisions.
5. Update Estate Planning Documents
Major life transitions provide a good opportunity to review important legal documents.
Consider reviewing:
- Your will or trust
- Powers of attorney
- Healthcare directives
- Beneficiary designations on retirement accounts and insurance policies
Even small life changes—such as marriages, divorces, births, or deaths—can make it worthwhile to revisit these documents.
6. Build a Retirement Budget
Your spending patterns may change once you're no longer working.
Consider estimating your anticipated monthly expenses, including:
- Housing
- Utilities
- Insurance
- Healthcare
- Travel and hobbies
- Taxes
- Everyday living expenses
Creating a realistic spending plan can provide a useful framework as you transition into retirement.
7. Understand Your Employer Benefits
Before leaving your employer, verify that you've completed any required paperwork and understand how your benefits will change.
Items to review may include:
- Retirement plan distributions
- Pension elections
- Health insurance continuation options
- Life insurance coverage
- Unused vacation or paid time off
- Stock compensation or deferred compensation plans
Having these details organized before your retirement date may help simplify the transition.
8. Consider the Non-Financial Side of Retirement
Retirement is more than a financial milestone—it's also a lifestyle change.
Many retirees find it helpful to think about how they'll spend their time, whether that includes:
- Volunteering
- Traveling
- Learning new skills
- Spending more time with family
- Pursuing hobbies
- Working part-time or consulting
Having a sense of purpose and routine can be just as valuable as preparing financially.
Final Thoughts
The months leading up to retirement are an opportunity to review the details, revisit your plan, and address any remaining questions before your retirement date arrives.
Because every retirement is unique, a personalized review can help you evaluate your income strategy, investment allocation, tax considerations, and other planning decisions within the context of your overall financial picture.
Flagship Financial Advisors works with clients throughout every stage of retirement planning. If retirement is on your horizon—or you're already retired and would like a second look at your financial plan—we'd welcome the opportunity to start a conversation.