Five Things to Do in the Year Before Retirement
Retirement is one of those milestones that seems far away until it’s suddenly right in front of you. After decades of working and saving for retirement ( you saved for retirement , right?), you suddenly find yourself facing actual retirement. And your last year before retirement can be really fun and exciting (work problems aren’t a big deal and you can make lots of fun plans for your upcoming free time) or really scary. Either way, now is the time to take important steps to make sure you’re prepared for what’s to come.
It’s not just about preparing your retirement accounts and investments (though you should definitely meet with your financial advisor and make sure you’re in good financial shape). You should also consider taking the following five steps when you’re about a year away from retirement, because they’ll be harder to take later.
Make the most of your benefits (including PTO)
Your job offers benefits that are part of your total compensation. It’s always important to make sure you use all of them you can, both because you owe them and because you shouldn’t leave anything on the table.
Review your employer’s paid time off (PTO) policy. Do they allow you banking services in those days? If so, how many of them do you have sitting idle because you’re as American as apple pie and never go on vacation ? Will your company pay you that money in cash when you retire, or will you lose it? If the latter, start planning how you can use them now. Having extra time off before officially retiring isn’t the worst thing, and it’s certainly better than wasting all that time or money.
In fact, you should review all the benefits you receive from your employer to see which benefits you should take advantage of before you leave and lose access to them. Everything from health and lifestyle programs to tuition reimbursement and employee discount programs should be given out for all their value, because once you turn in your credentials, they’re gone.
Consider a HELOC/Refinance
If you have large expenses in the near future, you should consider how you will pay for them now, before you retire. This is because refinancing a mortgage, opening a home equity line of credit (HELOC), or getting a home equity loan can be more difficult when you’re retired because you don’t have a stable salary income and banks sometimes won’t They are trying their best to make their standard models work. HELOCs can sit dormant for many years, so having one can mean you have the funds needed for major renovations or other projects in the future.
Proceed with caution here, however: If you haven’t determined how to use a HELOC, the potential risks associated with having one, including spending money just because you have one, may not be worth it. But if you think you might need to tap into your home’s equity, setting it up before you retire can be easier.
Get a full medical examination
If you’re a year away from retirement, you’ve probably already researched how to get health insurance after you leave your job, whether through private insurance or Medicare and some kind of “in-between” insurance plan. But whatever your plan, you should get a thorough medical checkup now that you’re still about a year away from retirement. The insurance coverage you get from your employer may be better than Medicare, so discovering that you have a serious illness or need expensive surgery now could save you a ton of money than dealing with it when it’s all on your dime . Even if this is not the case, or you decide to delay treatment for reasons other than financial, knowing that you may have to deal with something will allow you to plan ahead rather than react later.
Check your retirement budget
You’ve budgeted for your retirement years, right? Well, it’s time to check it out while you’re still working. You come up with numbers—income and expenses—but you won’t know if they actually work until you live with them. While you still have another year of work, try to live on the income you expect from your retirement assets (including Social Security if you’re eligible). This won’t be a perfect model because you’ll still be in work mode and may not have to spend money in retirement, but it will give you some idea of how realistic your estimates are. If you’re feeling unhappy and struggling, you’ll have to change your plan, and being able to work a little longer could save your life. Even if you’re committed to your retirement date, you’ll have time to calmly and efficiently find part-time work or cost-cutting options.
Explore Your Medicare Options
Finally, take a year and explore your health insurance options. Folks, the Medicare program is complex , and botched coverage or lack of a suitable supplemental plan can not only harm your health and well-being, but also cause deep damage to your wallet. Now is the time to make sure you really understand this while you are still covered by your employer’s insurance and still have the opportunity to change your retirement plans or financial strategy.
If you do these five things, you’ll (hopefully) face significantly fewer regrets in retirement, and that peace of mind will be priceless.