Top 10 Retirement To-Dos and Don'ts

HUNT VALLEY, Md. ( TheStreet) -- Retirement is hardly as easy as stopping work on Friday and breaking out the golf clubs on Saturday. Here are 10 things to think about before your co-workers take you out for a final, celebratory meal:

1. Plan at least 10 years before expected retirement to alleviate stress. It's actually very stressful for the 12 months before and the 12 months after your actual retirement. If you have not planned, you are merely hoping it'll be OK; seeing and knowing that the numbers work will alleviate a whole lot of stress.
Retirement is hardly as easy as stopping work on Friday and breaking out the golf clubs on Saturday.

2. Keep track of your monthly, yearly and decade-long expenses. The cash flow analysis is the most important retirement planning tool and yet it is probably only maintained by 10% of those over age 50. This invaluable tool will help you save, budget and moderate your spending to achieve your retirement goals.

3. Do not overspend on sending your child to college. All the statistics show that whether someone graduates from Harvard or a big state school has no bearing on the child's success in their career. Set a strict budget for college that fits into your retirement goals and have your child choose a school that meets that budget.

4. Reconsider your entire risk management plan as soon as your children have graduated from college. Liability, medical and long-term care are far more important as we head into our 60s. Do not do a risk management analysis with an insurance agent that will make a commission selling the product. Work with an unbiased, objective adviser who is fee-only in their compensation to determine your insurance needs.

5. Understand your company benefits and make sure you know how they work and how they coordinate into your overall retirement plan. Too often people want to retire at age 62 but don't have retiree medical insurance and now have a huge expense to carry for three years until they can begin Medicare.

6. At age 59.5, consider an in-service direct rollover to an IRA to have greater control of your investment choices. You would not do this if you need to borrow the funds or you plan to work beyond age 70 or you carry significant liability risk, such as a doctor does.

7. Pursue fulfillment, not just retirement. Make a plan to be engaged in the betterment of your community (local, national or international) and your family. It is in relationship (with family and in the community) that we find true joy, not just in the temporary buzz of entertainment (such as going on a cruise).

8. Be debt free, but do it wisely. Too often people focus on paying extra to a mortgage or refinancing a 15-year mortgage so the debt is paid off at the time of retirement. The problem with this thinking is that it takes after-tax dollars. If you opt to use your discretionary cash flow to pay off the mortgage, instead of max funding your 401(k), you may be missing a significant tax advantage. You will probably be in your highest tax bracket during the 10 years before retirement. That is the best savings time of life, so do not pay extra or go to a 15-year mortgage until you have maximized tax incentive savings plans such as a 401(k) or 403(b) plan.

9. Do not give your loved ones money ... but be sure to give your loved ones money. So which is it? The answer is both. Give to those you desire to give to, but not to the detriment of your retirement. Make sure the recipient is using the funds wisely and be sure you are not enabling bad behavior that will drain you. I have seen seniors impoverish themselves by giving recklessly to their children and grandchildren.

10. There is no such thing as a perfect plan, so do not expect to have one. Every financial decision is based on an assumption that will only prove right or wrong in time, so be careful not to put too much trust in any one investment/financial concept. Do not become overconfident in annuities, stocks, bonds or other "ideas" that seem great today because it may not work tomorrow. Understanding the risk associated with any investment is of the utmost importance.

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Andrew Tignanelli, CFP, CPA, is president of Financial Consulate, based in Hunt Valley, Md., and a member of NAPFA, the National Association of Personal Financial Advisors.

This commentary comes from an independent investor or market observer as part of TheStreet guest contributor program. The views expressed are those of the author and do not necessarily represent the views of TheStreet or its management.

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