So says Larry Rosenthal, a certified financial planner and principal at Rosenthal Wealth Management Group, a Manassas, Va., investment advisory firm. "Planning for retirement can be a burdensome task," Rosenthal says. "While the transition can be difficult -- emotionally, mentally and financially -- the sooner you start preparing the better. Ideally, pre-retirees should begin planning years in advance, but many people find it can be difficult to get the metaphorical retirement ball rolling." To make that shift into retirement easier, Rosenthal recommends a retirement checklist to be addressed in the year before calling it quits on the career front: Refinance your home: You want to make sure all of your fixed costs are as low as possible. Conduct an insurance audit: You don't want any surprises with reduced benefits or increased costs. Have a dress rehearsal: Practice living on your estimated retirement income six months before you actually retire. It's important to see how your income stacks up against your expenses. (This goes hand in hand with your big-ticket purchases. Consider that one of the most overlooked retirement expenses is the car or truck you own. If you get a new car every seven years, that's likely three cars in retirement.)
Reallocate your investments: Approaching retirement, you'll want a more conservative plan to minimize unwelcome market surprises. You'll also want to make sure your plan is customized to grow, protect and deliver income in the most tax-advantaged way.
Your checklist should also include moves not to make on your retirement checklist. That "biggest mistakes to avoid" portion of the list includes: Not filling time: You just got done spending about 10 hours a day working, including an average commute. Now you have to fill that time. Don't spend 10 hours a day blowing money on entertainment. Not being active: Get up off the couch and get busy doing different things, don't just sit around. Not being patient: You have plenty of time during retirement; you don't have to travel the world in the next 12 months. Some people never really retire, Rosenthal adds. "They just stop their primary job and then go back to work right away in the same industry and end up working until they can't anymore -- and miss their retirement." If that's you, add that into your retirement checklist. The good news is that your checklist is dynamic and flexible, just like your future in your post-career years.