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Presented by Nicholas Scheibner, CFP®
View or listen to our video for Nick’s to-do list prior to retirement
- HELOC: Consider getting a home equity line of credit. While you are working, you are more likely to qualify for a HELOC. This can be a good way to bridge money or pay for an emergency home repair. Also, evaluate if you should refinance your current mortgage.
- Health Insurance: If you retire before 65, plan for expensive Health Insurance premiums. Maybe you have enough vacation/sick time built up that you can stay on the insurance until Medicare kicks in.
- HSA: Fund your HSA (Health Savings Account). If you have the option to contribute to an HSA, you’ll want to make as many contributions as you can before you apply for Medicare.
- Social Security: Disassociate “retiring” with “collecting Social Security”. You can stop working and continue to delay your Social Security application. This may be beneficial, as each year you earn Delayed Retirement Credits.
- Social Security before FRA: If retiring before your “Full Retirement Age” of Social Security, understand how those missed years of work may affect your Social Security estimates. Most estimates from the SSA are based on you “continuing to work until X age”. Depending on your work history, 1 or 2 missed work years may or may not have a large impact on your monthly payment.
- Donor Advised Fund: Consider a Donor Advised Fund for a large one-time charitable donation. If you have one year left of work income, and you consistently make large charitable donations each year, you may be best served by aggregating those future payments with 1 lump sum payment to a DAF. After you work, and before RMDs start, you may be in a lower tax bracket.
- Roth IRA: Open a Roth IRA account for potential conversions after retirement. After you retire, before Social Security, and before RMDs, you could find yourself in a very low tax bracket. These could be great years to consider Roth Conversions.
- Build Up Cash: Build up your savings account. Once someone retires, most take a few months to find a rhythm with their new lifestyle. In the beginning, you may find yourself traveling and going out to eat more frequently. You just found 40 hours per week that you need to fill!
- Discuss with your Team: Talk to your financial professionals to help you plan for the next phase of your life - Financial Advisors, Accountants, and Estate Planners – to determine if your income in retirement is sufficient to sustain your lifestyle and to make sure your estate documents are in place.
- Enjoy: Finally, take some time to Enjoy! Your first job may have been in your teens. You’ve worked for 30, 40, or 50 years. Take some time to enjoy some travel, time with friends and family, or personal hobbies.
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This is a general communication being provided for informational purposes only. It is educational in nature and not designed to be as advice or a recommendation for any specific investment product, strategy, plan feature or other purpose in any jurisdiction. Past performance is no guarantee of future results.