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Retirement Planning
Checklist
Having a financially
secure retirement is one of the most important reasons people work, save
and invest. Because it is often many years away, planning for that security
can be easy to put off. This worksheet identifies some of the most important
issues associated with a successful plan and suggests steps to take to
reach that goal.
You may want to print
this page (or click here to download
the pdf file) to record your information.
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Date
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Item
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Actions
needed
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Estimate
your retirement income needs.
Many advisors
suggest that living expenses after retirement will average 60% to
75% of pre-retirement needs.
To have that
level of retirement income available, determine the level of assets
you will need to have accumulated by the time you anticipate retiring.
Determine how
much you need to save between now and your estimated retirement
to have accumulated the necessary funds.
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2.
3.
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Employer
retirement plan
Are you participating?
Are you contributing
enough to "earn" the full employer match?
Review the vesting
schedule of your plan.
Do you have
the right investment mix within your retirement plan account?
Are current
contributions to your account being invested appropriately?
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2.
3.
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Individual
Retirement Accounts
Are you contributing
to an IRA to get the benefit of tax-deferral on those funds?
If age 50 or
over, are you making the full allowable "catch-up" contribution?
Have you considered
whether a Roth IRA is more appropriate for your situation?
Have you considered
converting your regular IRA to a Roth IRA to get more flexibility
for distributions and the opportunity for tax-free distributions?
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3.
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Social Security
Review your
Social Security Statement when you receive it and make sure it is
accurate.
As you near
retirement, consider the feasibility of beginning to your benefits
at age 62 instead of the normal retirement age.
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3.
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Retirement
Plan and IRA beneficiaries
Be sure to designate
the appropriate person. Your beneficiary form, not your will, usually
determines who gets the assets when you die.
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3.
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IRA or Retirement
Plan distributions
Be aware that
distributions before age 59 ½ will probably result in a 10% tax
penalty.
Distributions
from regular IRAs must be started at age 70 ½, but there are no
distribution requirements for Roth IRAs.
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3.
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Retirement
plan distributions
There are three
major decisions to be made when receiving a lump sum distribution
on retirement or changing jobs.
- Do you want
to pay taxes currently on the distribution or roll it over and
continue the tax deferral? You must decide within 90 days of receipt.
- Where do
you want the funds? You may be able to leave it in the prior employer's
plan, move it to your new employer's plan or do a roll-over into
an IRA. Your decision should be based on costs, availability of
investment choices and the amount of control you want over the
funds.
- How do you
want to invest the funds? A retirement plan distribution may be
the largest amount of money you ever receive. Be sure to invest
it wisely and include it in your overall investment strategy.
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