Should You Have a Retirement Timeline?

Those who are working toward retirement often focus all of their energy on making sure their asset base for retirement is adequate and well positioned in the market. To a degree, this makes sense; when we are working, and especially when we are in our peak earning years, we should pay careful attention to funding our future retirement.

But how much time have you given to thinking ahead about the events leading to and during retirement?

Right now, each day when you go to work, you probably have some sort of plan for what you intend to accomplish that day. Maybe you’ve got a meeting with a potential client; you will probably run down your mental checklist of topics you want to cover in the meeting. Then, you will probably give some thought to what might happen later in the day: a report you need to finalize; a meeting you need to schedule; some data you need to check.

But what about when you retire? No longer will you have those daily meetings, phone calls, emails, or presentations. How will you organize your day? Do you plan to volunteer? Work part time? Travel? Spending a little time planning can take some of the stress out of those first days of retirement.

Similarly, you might consider a pre-retirement timeline: certain benchmarks or points of reference on the way to retirement that can help you make the transition into retirement with a sense of purpose and strategy.

40s: Do you have a financial plan in place? How does college for your kids fit into your long-term planning?

50s: It may be time to review your plan. Do you need to up your savings goals? Should you focus on paying off the house?

Mid-50s to early 60s: You will want to start learning about any special terms your employer has for separation from employment. What about your 401(k) vesting?

59 ½: You are eligible to make withdrawals from your IRA accounts with no IRS penalties. The same applies to withdrawals from SEPs, 401(k) plans, 403(b) plans, and 457 plans. Certain rules may apply to these withdrawals if you are still working for the employer who sponsors the plan; you should check these out.

60: Your Social Security survivor benefit can start, but if you begin taking these payments now, the amount will be reduced permanently.

62: You become eligible for personal Social Security payments, though they will be reduced if you don’t wait until full retirement age (FRA).

65: You can sign up for Medicare; the window is from three months prior to turning 65 until three months after. Don’t miss this window!

65-67: FRA–if you were born in 1937 or earlier, it’s 65 and increases to 66 for those born 1938-1954. A birth date in 1955 or later means your FRA is 66 and a few months, and if you were born in 1960 or later, your FRA is 67.

70: You get the largest Social Security benefit if you wait until now; your benefit increases 8 percent each year you wait past your FRA.

If you are looking ahead to retirement, consider these timelines. They can help you do a better job of planning for and transitioning into a satisfying and well-funded retirement.

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