Retiring in the Next Year? Make the Most of Your Final Year of Work and Get Ready – Your Preparing for Retirement Checklist
Are you approaching retirement age or in your last year of work and preparing to retire soon? Check out Novo Wealth’s Preparing for Retirement Checklist for ideas on how you can navigate this final run to retirement, as well as tips to help you prepare for this exciting new phase in your life.
Read on to learn how you can take advantage of your super to help you achieve your ideal retirement.
At 12 months to retirement
The last 12 months before retirement can be a busy time as you try to get all your affairs in order, so you can enjoy your retirement years with total peace of mind. Here are some tasks you’ll want to take care of by the time you reach your last year of work.
Review Your Retirement Plan
Regularly reviewing your retirement plan in the years leading up to your retirement (and checking in on how it is progressing post-retirement) is critical to staying on track to achieve your ideal retirement. A review of your retirement plan includes:
- reviewing your financial plans – review your superannuation fund statements and investment accounts; can you afford to retire on time or do you need to work a little longer?
- reviewing the potential retirement budget – the last year of work can also be a good time to trial your retirement budget to discern if it will be enough to enjoy the lifestyle you want.
- reviewing retirement income sources
- reviewing current debt and your trajectory for eliminating debt
- confirming financial and personal goals for your retirement
- understanding how well your finances and goals are aligned
This last major review of your whole retirement plan is a critical step in securing the retirement you’ve worked hard to achieve. It’s important you ensure you take the time to speak with an ethical financial planner (if you haven’t already) to put a retirement plan in place or finalise the details of an existing plan.
Living Arrangements & Assets
The next step is to set up your living situation, which will be dependent on several questions:
- Do you plan to travel? Will this travel be long trips (months or years) or short trips (weeks to a few months)? Firstly, you will need to plan for how and where you want to travel and start making the appropriate preparations. Secondly, you will need to what to do with your assets and home contents while you’re traveling – especially if you will be adventuring for long periods of time. This will be particularly important if you own your home – do you need to sell it? Rent it out?
- Does your home need any major repairs or maintenance? Do any upgrades need to be made to prepare for your retirement or for future care? It’s important to have a yearly maintenance budget for your home in your retirement plan, but it’s also worth considering if you can future-proof your home now while you’re still working. Alternatively, if you’re looking at selling or leasing your home after retirement, it will be worthwhile to do a complete review of the house for any repairs or upgrades that can potentially increase the value of the property.
- Do major assets – like your home or car – need to be downsized or upgraded? It’s worth considering your potential future needs, as well as current needs, when it comes to where you will live and how you plan to get around. For example, a home with a lot of stairs is not going to be a suitable home in the long term.
Review Your Insurances – Life, Health & Home
Once you have settled on what you will be doing and where you will be for your retirement, you can work with your ethical financial advisor to review and update your various insurances. You will want to review your insurance products to ensure that you have the best possible prices and the right amount of coverage for your current and future needs. Insurances you may want to review, update or invest in:
- Life Insurance Schemes
- Health Insurance
- House and Contents Insurance
- Car Insurance (if applicable)
- Landlord’s Insurance (if renting out your property)
- Travel Insurance (if traveling)
Talk To Your Employer About Your Retirement Plans
Now that you have a solid plan in place for your retirement and you feel financially secure to move forward, the next step is to talk with your employer about how you want to proceed. Some tips for approaching your retirement with your boss:
- First and foremost, follow the company protocols regarding retirement.
- Discuss your proposed retirement date and a timeline for finding a replacement if needed
- Explore work options if you are looking to transition to retirement, rather than go from full-time work to fully retired.
- You can also consider leave options if they’re available to you, such as long service leave or a holiday before you fully retire.
At 3-6 months to retirement
The last 3-6 months before retirement is when you can start tying up any loose ends and do a final review of your retirement accounts to ensure you are on track with your personal and financial goals. This can make for a busy time as you try to wind down with work, but it will be worth it to enjoy your retirement years knowing you have everything in order. Here are some tasks you’ll want to take care of in these final months.
Final Review of Financial Plans and Budget
This is a good final check that all your financial plans are on track and you’re ready to make the transition to retired living or make any last-minute changes if needed. This is important in case unexpected events have affected your retirement savings or you find yourself in unexpected circumstances that have changed your immediate or future needs.
Of course, these things can still happen in retirement as well, which is why it’s important to continue checking in on the health of your funds, savings, and plans with a financial planner during your retirement as well.
Review Your Estate Plan and Update Your Will
This won’t be the last time you do, as you should review/update your will every 3-5 years or following any major life changes, but it is worth doing in the months leading up to your retirement. You’ve got your retirement plan sorted, you’ve made the necessary arrangements with your employer, you’ve spoken to your family, and you have secured your financial future – now it’s time to ensure your will and estate plan are up to date for your family’s financial future. You should also choose an executor of your will if you haven’t already.
Enduring Power of Attorney
Organising an enduring power of attorney can be a confronting step for a lot of people, but it’s an important step to take care of before you retire and make big life changes – especially if you plan on long-term travel or relocating. You’ll also want to have an advance health directive in place too. Ultimately, you need to make sure that you can be cared for in the event you are unable to make medical or financial decisions for yourself.
Applying for Government Benefits or Services
In these last months before retiring, you should also start applying for government benefits, such as the age pension or Medicare, if you are eligible for any payments or services from the Australian Government. It’s important to note, you can apply for the age pension 3 months in advance.
Preparing for Retirement Emotionally and Mentally
While taking care of your financial future is critical for ensuring your well-being in retirement, it’s also worth taking into consideration how you will support your emotional and mental well-being during retirement.
Whether you are looking to start new hobbies, commit to long-term travel, begin charity work, or learn new skills, you will need to factor these projects and activities into your retirement budget, and many will require preparation or research to get started.
Taking on new challenges or dreams is an incredibly rewarding way to spend your retirement and is a powerful tool for supporting our emotional and mental health as we get older. However, amid paperwork, heavy conversations, and preparations, it can be easy to overlook this aspect of retirement. It’s critical to your long-term health and well-being to have a plan for how to spend your retirement, which will make the transition from working life to retired life much easier, and ensure you are financially covered to support these plans.
Are You Ready to Make an Ethical Retirement Plan?
There is no single solution to approaching retirement and you need to work with an ethical financial planner that can understand your unique circumstances and help you navigate the best path forward for you, while aligning with your values.
If you want to learn more about retirement planning, Novo Wealth in Adelaide offers tailored retirement planning and ethical financial planning to help you achieve financial freedom and live your best life.
The sooner you start planning and preparing for your retirement, the better – secure your financial future today and speak with an experienced, ethical, and compassionate financial planner at Novo Wealth.