Retirement Planning Checklist
While retirement is like the sweet fruit you get to eat after years of hard work, it is important that the fruit it bears is harvested to the best of its capacity. One of the main worries that surround retirement is the financial aspect of it. Everyone wants to ensure that they’re reaping the best benefits and hope that they’re not missing out on any retirement essentials.
6 Point Retirement Planning Checklist
- Assess your current financial standing
- Create a surplus/emergency fund
- Understand your current debts and liabilities
- Map a post-retirement budget
1. Assess your current financial standing
Take this as the first step or maybe as a step that you take even before you finally give retirement a serious thought. This is especially most important for the ones who are looking for an early retirement checklist. Create a balance sheet and assess where you stand financially. Take into account all your assets – savings, property, shares, insurance, etc. Next, subtract all your debts and liabilities. This sheet will not only help you understand how your financial status looks like but will also give you a clear idea of whether you are financially ready for retirement or not.
2. Create a surplus/emergency fund
Emergencies don’t knock with prior notice. Handling emergencies becomes especially tricky when it comes to retirement finances. Ensure you set aside a certain amount from your savings for emergencies. Having insurance additionally will come handy here. Basically, it’s ideal to avoid a hand to mouth situation post-retirement. Hence, this step, that right now may seem trivial, will really keep you covered in the long run.
3. Understand your current debts and liabilities
For a peaceful retired life, it is of utmost importance that you start getting rid of your debt as early as possible. Debt management would include taking stock of your outstanding liabilities, prioritizing them, and devising a plan for clearing them out. Your liabilities can include house/property expenses (rents, taxes, liabilities), credit card debts, bank loans, leisure expenses, taxation, insurance premium payments, etc.
4. Map a post-retirement budget
A good plan is one that is thought through – both in terms of research and detailing. Here too, this part of the checklist requires you to think for the future and calculate the expected sources of income and also your expected expenditure. Your post-retirement sources of income can include social security benefits, pension, return on investments, etc.
To sum it up
For a happy second inning of life, you must prepare for it right from a young age. Retirement planning is a step by step process to ensure you have enough financial backing when you are not working.