The Financial Planning Checklist You Need Before Retirement


Have you wondered what life post retirement would look like? Most folks chalk out a list of goals well in advance and generally wish to take up things like traveling, gardening, catching up with old friends, exploring volunteering opportunities and countless others. But as retirement draws closer, so do the nervous apprehensions of being underprepared.

Are you financially ready to take on retired life? Will your savings and investments help you sustain in the long run? It is common to ask yourself these questions a few years before you are about to retire. However, the best way to deal with such fears is to tackle them head on. The key is to boost your financial preparation from the get go by tapping into long term investments and being mindful about money matters.

We have put together a handy checklist that highlights key areas of financial planning that you must tick off if retirement is on the cards for you in the near future.

5 Personal Finance Rules To Abide By Before Retirement

1.Start by evaluating your expenses

It is always good to have a clear estimate of your retirement costs that covers both short and long-term expenses to help you develop an accurate spending and withdrawal strategy. This should ideally include living expenses, leisure and entertainment, utilities, healthcare and insurance to begin with.

You may decide to travel more often or perhaps downsize your current house, which is surely going to impact your home finances. To cover such specific retirement needs, it is best to leave some room for extra expenses especially during the first year of retirement. You should also continue to maintain an emergency fund as it can be of great help in case your savings fall short at any given point.

2.Take stock of your retirement corpus

If you started contributing to a retirement fund in your 20s or 30s, it is likely that you will have a considerable amount of money saved up by now. If retirement is just around the corner for you, it is best that you calculate your net worth by taking stock of all your investments based on the current market value and create your own personal balance sheet.

Once you have the value of your investments in place, consider all your liabilities like outstanding loans or debts and deduct that amount from the total value of your investments. This should give you a realistic idea of how much your retirement corpus is worth.

You can also get in touch with wealth management companies to help you boost your finances and make better investments. Dezerv is an expert-led investments platform that can manage your financial portfolio to help you maximize your investments and manage wealth better.

3.Make it a goal to become debt-free

Managing debt is one of the most crucial aspects of financial management especially around retirement age. If your dream is to have a stress-free retired life, starting with a clear slate that is free of outstanding payments and other liabilities is a must. You do not want to be paying high interest loan amounts right out of your retirement corpus, which is a limited resource after all.

Take charge of your liabilities by dealing with debts on a priority basis. Attempt to repay higher amounts like car loans and personal loans first, even if this chips away on your savings fund. Becoming debt-free before retirement is something that you will definitely be grateful for later.

4.Time to diversify your investments

Adjusting your investments portfolio is a smart financial move to make before retirement. You need to make low risk investment choices that will be more in alignment with your future financial needs. It is best to devise an investment strategy that combines growth, income and safety while also accounting for your risk tolerance.

Liquidity and safe assets become a priority after retirement so it is advisable to focus less on equities and more on balanced and fixed-income assets like bonds so that you can put these investments to good use. Look for a good mix of debt options and equities so that you have more capital protection even after retirement.

5.Plan and review insurance policies

Setting up good medical insurance and health related policies in place is key in order to avoid any financial distress during retired life. Starting on a comprehensive health insurance cover a few years before retirement is great due to lower premium costs and better options to choose from. While accounting for medical costs and insurance, also look for long-term care coverage options to factor in all your healthcare requirements.

Additionally, investing in property insurance can also be beneficial in order to protect your home and other real estate assets, if any.

We hope that these financial tips serve as a roadmap to guide you towards a secure retirement plan. It is important to ensure that these given safety nets are intact and have been ticked off in time in order to help you be truly financially prepared to take on life post retirement.