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5 Things To Consider Before You Retire

Before You Retire Go Through This List

When to retire is one of the biggest decisions you will ever make. And your idea of retirement may be different from others. Your idea could be continuing to work part time, starting a new business, volunteering for a charity, spending more time on hobbies like hunting, fishing, or hiking.

Whatever you have in mind for retirement, you want to plan accordingly so you can achieve the goals that are important to you. And as your planned retirement date approaches there are some things you need to consider before you retire. Here are just 5 important considerations to keep in mind to maximize your chances of a successful retirement.

  1. You May Not Be Able To Work As Long As You Thought

A new study done by Employee Benefits Research Institute found that retirees quit work earlier than they expected. In fact 50% of survey respondents retired before they had originally planned.

And often the reasons were beyond their control. On page 26 the report reads:

“The RCS [Retirement Confidence Survey] has consistently found that a large percentage of retirees leave the work force earlier than planned (50 percent in 2015) (Figure 34). Many retirees who retired earlier than planned cite hardships for leaving the work force when they did, including health problems or disability (60 percent), changes at their company, such as downsizing or closure (27 percent), and having to care for a spouse or another family member (22 percent). Others say changes in the skills required for their job (10 percent) or other work-related reasons (22 percent) played a role.”

This means you need to be flexible in your retirement planning, especially when it comes to your expected date of retirement.

But not only that, you need to build flexibility into your retirement plan to adjust for some of the consequences of an earlier than anticipated retirement. Some consequences could include:

  • Saving less in your 401(k)
  • Preparing for a few extra years in retirement
  • Considering a different part time job if a disability does not allow you to perform your previously planned part time job
  • Cutting expenses to compensate for a smaller nest egg and longer estimated retirement

It never hurts to have a Plan B in place. We just hope we’ll never have to implement it.

  1. Determine what level of income you will need.

You need to have a proper retirement income plan in place before you retire.

[Fortunately for you, I wrote about how you can put a plan in place in this FREE report you can download.]

A good rule of thumb when estimating your retirement income needs is 70% of your pre-retirement income. This really is just a rule of thumb to get you started.

I much prefer the method of calculating your estimate monthly retirement expenses. Then determining how much after-tax money you will need to cover those expenses. This is more precise.

But 70% is a good starting place.

  1. Determine if you have enough money to make your income needs a reality

To determine how much money you need to generate the necessary income, another good rule of thumb to use is the 4% rule. This simply says if you withdraw 4% of your portfolio when you retire you have a reasonable chance of not running out of money.

Now the 4% rule assumes you will have some equity (growth potential) exposure in your portfolio. You will need the growth in retirement. And it assumes that you increase your withdrawal amount each year to keep up with inflation.

But again, this is a rule of thumb. It is a good place to start.

So determine all your income sources, like Social Security, pension, rental income, etc. Then figure out how much more you need to cover the gap between your income and your expenses.

That gap will be filled with withdrawals from your nest egg. Are those withdrawals greater than 4% of your nest egg? If so, you may be in trouble.

The 4% rule can help you quickly see if you will be in trouble.

  1. Have I Considered The Impact Of Inflation On My Retirement?

You also need to assume we will continue to have inflation in the economy. This means you need to estimate how the rise in prices will affect your purchasing power.

A good estimate to use is 3%. Some years are higher, some years are lower. But it’s another one of those rules of thumb.

Also keep in mind that inflation does not apply evenly across the board. Some goods and services increase at a higher rate than others.

For example, historically medical expenses have been increasing faster than the general level of inflation. Unfortunately, as we age and enter retirement we use more medical services. So this can have an impact on your retirement planning.

  1. What’s My Plan To Protect Against Health Care Costs?

Most retirees will be on Medicare in retirement. Original Medicare (without a supplement or Advantage Plan) has no annual cap on what you can be out of pocket.

The Part B gap on Original Medicare is 20%. So if you have a surgery that costs $100,000, it is possible you may be on the hook for 20% of it, in this case $20,000. If the surgery were more expensive, your 20% portion would be higher. There’s no cap.

You can fix this with a Medicare Supplement or even a Medicare Advantage Plan. These typically put caps on how much you can be out of pocket each calendar year.


This list may not be comprehensive, but it includes 5 necessities you need to consider before retiring.

Do you know someone that is retiring soon that could use benefit from this information? If so, forward this article / video to them. We can help more people by all pulling together to get the word out. I’ve made it easy to share this with your friends by simply clicking the Facebook icon on the left of the screen.

And if you have retirement questions for your own situation, you can reach out to me and ask. You can make an appointment on my calendar for a 20 minute phone conversation by clicking here. I will help point you in the right direction.

Best of luck!

Chris Hammond


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This information is designed to provide general information on the subjects covered. Pursuant to IRS Circular 230, it is not, however, intended to provide specific legal or tax advice and cannot be used to avoid tax penalties or to promote, market, or recommend any tax plan or arrangement. Please note that Tri-State Financial Group and its affiliates do not give legal or tax advice. You are encouraged to consult your tax advisor or attorney.

Annuity guarantees rely on the financial strength and claims-paying ability of the issuing insurer. Any comments regarding safe and secure investments, and guaranteed income streams refer only to fixed insurance products. They do not refer, in any way to securities or investment advisory products. Fixed Insurance and Annuity product guarantees are subject to the claims‐paying ability of the issuing company and are not offered by Retirement Wealth Advisors. Chris Hammond is insurance licensed in TN.