Nine Point Retirement Checklist

Once you retire, you want to stay retired. At the very least, you don’t want to be forced back to work out of financial necessity.

The problem is you aren’t taught how to retire in school. For most people, it’s a “learn as you go” process. But that’s dangerous. What if you overlook something really important? You don’t want to even think about that because it could lead to retirement failure. There is simply too much at stake to formulate your retirement strategy on the fly.

Fortunately, you can use the following Retirement Planning Checklist to reduce the chances of anything forcing you back to work or ruining your financial situation after you retire. Let’s get to work:

1. Define your retirement life.checklist

You are probably very tempted to jump right into the numbers to see if your retirement plan works. I understand that. But slow down cowboy/cowgirl. My experience tells me the most important first step is to have a very clear picture of what kind of future you want to build for yourself:Do you want to travel? Where? How much will you spend on that annually?


  • Do you want to travel?  Where?  How much will spend on travel each year?
  • Do you want to move? Where? Why? How does that impact your financial life?
  • Do you still want to work or volunteer?
  • What does your day look like? Who do you spend time with?

It’s hard to know for certain what your future will be but it’s important to give it some thought. Talk it over with your spouse and make some estimates. This is important stuff. If you don’t know where you are going you can’t possibly know if you can afford the ticket.

2. Consider if you really still need life insurance or not.

Many people worry about retirement expenses so let’s consider some important ways to save some dough. One way you might be able to take a big chunk out of your retirement cost of living is to cut out life insurance you no longer need.

Don’t get me wrong. I love life insurance. But only if it’s required. The thing is, once you retire, you may no longer need it. If fact, you may be able to pitch this expense long before you retire.

Life insurance is a tool and it costs money. Other than for estate planning purposes, you only need life insurance if your death would leave other people you care about in a very difficult financial situation. If you don’t want to see that happen you probably need life insurance.

But as you get older fewer people rely on you financially. And as you get older, your assets might grow such that your dependent survivors could create enough passive income from those assets. So depending on your situation, you may not need life insurance when you retire (or before). If you no longer need it, get rid of it. That’s an important savings.

3. What other expenses can you toss overboard?

While we’ve got the scissors out, look over your spending and identify other expenses that you can cut now or once you retire. The easiest way to do that is to go through your checking account and credit card statements with your spouse. Circle those costs that you can cut and get to it.

4. Do you still need/want to own your home?

Most people dream of owning their own home and being mortgage free once they retire. I used to be one of those people but not anymore.

Once I realized how much it costs to own and maintain a home – even one that is paid off – my thinking changed. Don’t misunderstand me. Owning property can be a wonderful way to build wealth. But that doesn’t mean you have to live in the property you own. Sometimes the best real estate investments are rental properties rather than residences. And many retirees find that they can rent for less than what they pay in property taxes and maintenance on their residence.

Of course this depends on where you live, how you want to live and the local market. Also, renting has its risks; when you become a renter you give up control and you are subject to rent increases. But many retirees are selling and becoming renters anyway. They do so because it can free up lots of capital which can be invested to create more income and it can cut housing costs. Consider this as a possibility.

5. Track your spending in 5 minutes a month.

Your retirement success depends on a delicate balance between your income, assets and spending. Of these three components, you have most control over your spending. And if you want to control your spending, you have to track it.

The big problem with expense tracking is that it’s no fun and takes a lot of time. At least that’s what many people think. But the truth is you can actually track your spending in less than 5 minutes a month.

You do that by simply looking at your bank statement. That’s right. Your bank statement summarizes your spending for you. If you look at you bank statement you’ll see that it has one number that reflects your total withdrawals for the month. Guess what. That’s how much money you spent.

What I do is simply track that one number each month and calculate my average monthly spending over each year. Of course there are adjustments that need to be made if I take money out of my bank account and invest it. And if you have multiple bank accounts, this is a bit more complicated.

But if you simplify your financial life and use one bank account, this works like a dream. I review my “total withdrawals” number on my bank account each month. If I see a problem or something unusual, I look through my checks and credit card statements for more detail.

You can also use a budget tracking software program in conjunction with this simple process if you want more information. That isn’t a bad idea at all. But if you are limited by time and patience, use this “5 minutes a month” tracking method to stay on top of your outflows before they start controlling you.

6. Project your spending during retirement.

Of course your retirement spending is going to be different from the amount you spend now. And it’s impossible to know for certain what your costs are going to be. But that doesn’t mean you shouldn’t make some educated projections.

Go through your monthly recurring costs and evaluate what potential changes you are looking at. If you take this step carefully, you’ll see that your retirement cost of living may be far lower than you otherwise thought.

7. Retirement pensions and Social Security.

Now that we’ve examined your costs, let’s consider your income. First on the list is the income you can count on from pensions and Social Security. These are easy numbers to find. Simply contact your HR department regarding any potential pension projections and get your Social Security estimates online.

8. Passive investment income.

All the years you spent working, saving and investing are going to finally pay off. If your spending outstrips your pension and Social Security income, you can tap into your investments for passive investment income.

And remember, just because you need income from your investments doesn’t mean you have to sink all your money into bonds and annuities. You can (and possibly should) use some equity growth to create the income you need. Why?

Because over time, equity growth has the potential to provide better returns. And if growth provides better returns than bonds or annuities, you can possibly have much greater income by using equity.

Of course equity growth has its drawbacks. The short-term risks are different with growth than they are with bonds and annuities. But remember that you need retirement income for a very long time. That means you need to make the best decision to provide the best potential results over the long-haul and equity just might be a great alternative for you.

9. Bridge the gap.

After you figure out what it will cost you to live and what your retirement income is going to be, it might be time to do some soul searching. If our total income won’t cover all your projected costs you have some decisions to make. You can:

  • Cut expenses.
  • Grow your assets at higher rates.
  • Increase retirement income.
  • A combination of all the above.

You can see that getting ready for retirement doesn’t have to be a daunting task. If you break the steps down and tackle them one-by-one, you can easily improve your retirement readiness big time.

Are you prepared for your retirement? Why or why not? What questions do you have that I can answer? Let me know if I can assist in any way.