9 Things You Should Do With Your Money Before You Retire

Take care of these nine things to set the stage for a great retirement.

Decided to retire, have you?

Congratulations! It will be awesome – as soon as you take care of a few things.

Whether your exit date is three years or three months away, here are nine things you should resolve before that blowout retirement party. Taking care of this business will help with your transition and set the stage for a great retirement.

Nine Financial Goals Before Retirement

1. Set your retirement budget.

This was probably done well in advance and tweaked as things changed. If not, get with your spouse and list all your expected monthly expenses. Compare this with all your retirement income streams – Social Security, savings, pension, rents, part-time work, et cetera – and make sure it’s all in sync. If not, figure out ways to reduce costs or increase your income. Be sure to allow for one-off expenses (a 50th-anniversary trip) and emergencies in your budgeting.

2. Land a part-time job. Working part-time is a great way to ease into retirement. It provides routine, social interaction and additional income that can take pressure off your savings. Look at jobs that might appeal to your interests, and give you enough flexibility to enjoy the freedom of post-career life.

3. Start researching insurance. Medicare coverage kicks in at 65. If you are retiring before that age, you’ll likely need to buy a policy.

That will be expensive. Budget about $1,000 per month for a policy that will cover you and your spouse.

The verge of retirement is also a good time to review your other insurance policies – home, auto, life – to make sure you have the right coverage for this stage of life. For example, you may no longer need that huge life insurance policy that was designed to replace 20 years of your income.

4. Pay off your mortgage. The happiest retirees have no mortgage, based on research for the book, You Can Retire Sooner Than You Think. A paid-off house dramatically increases your monthly cash flow and eases the budget pressure if things get tight down the road. Pay off your credit card balances, too.  Interest-loaded minimum payments will eat away at your retirement nest egg.

5. Power of attorney. Designate someone you trust implicitly to handle your affairs if you are incapacitated. Trust me when I tell you to prioritize this decision. We never know what’s coming for us, and there are too many cases in which suddenly-diminished people were financially victimized – often by family members.

6. Think about relocating. Your money will go further living in a low-cost area. If you aren’t really tied to your expensive current city, begin researching places that offer a nice lifestyle with lower taxes and cost of living. Many college towns in the middle of the country fit that description. If you are adventurous, explore the idea of joining the thousands of Americans who have retired in low-cost countries, many of which are in Central and South America, an easy plane ride away.

7. Downsize.

The kids are gone, you don’t entertain a lot -- it might be time to let go of that big ol’ house.  Moving to smaller quarters offers many potential benefits – smaller maintenance and energy bills, shorter honey-do lists, and maybe even a profit from the sale that can be used to fund other wants and needs.

8. Write your will. A will lays out your wishes for the distribution of your estate. Incredibly, 41% of Americans don’t have a will in place.  If you are among that number, you risk the state deciding who gets the fruits of your life’s work.

9. Buy a rental property. If you have met all your other retirement-related money goals, think about buying a rental house or condo to juice your monthly income. Think careful on this one, as there are lots of potential pitfalls and you will need to devote time and energy to the property, even if you hire a management company.

This list may seem a bit daunting, but it’s so worth the effort. Every box you tick brings you closer to a new and amazing phase of your life. So, to borrow from the great philosopher, Larry the Cable Guy, “Get ‘er done!”