Non-Financial Decisions to Make Before Retiring

David Ning
September 18, 2013
A retired couple sits on a bench in Enghien-les-Bains
A retired couple sits on a bench in Enghien-les-Bains, north of Paris, August 26, 2013. REUTERS/Christian Hartmann

Once you have enough savings, manageable expenses and your kids are out the door, you might begin to think you are ready for retirement. But there are still several details you ought to spend some time figuring out before you tell everybody about your plans to retire:

Plan on a good time to say goodbye. Your colleagues in the workplace are often people you've been with for years. Don't leave them stranded in the middle of a big project simply because you want to quit for good. There's no need to rub it in everybody's faces that you get to skip all those boring meetings. They already know this without being reminded. Plus, work connections may remain useful even after you retire, perhaps if you need a referral for a consulting job or a favor for your son's job search.

Figure out where you want to live. You should have built plenty of equity in your home by now, and it may make sense for you to move to a cheaper (or warmer) place to spend your retirement days. Even if you don't plan to move to another geographical area, downsizing may be a good way for you to cash out and use the savings you've built to increase your lifestyle a bit. This is a decision that drastically changes the calculus on how much you need to save, so it's best if you have the details figured out while you can still earn extra income if you need to.

Know exactly how you will replace your paycheck. You need an income strategy for retirement that helps you to avoid drawing down your savings too quickly or slowly. With multiple pre-tax and post-tax accounts as well as different investments with different cost basis lots, failing to plan may leave you paying a ton of unnecessary taxes that could easily be avoided by planning ahead.

Reassess insurance needs. Once you retire, you likely won't need the life insurance policy you've been paying for years. Can you get out of it? For some people it makes sense to stop paying the premiums because your family simply is no longer relying on your income from your job. While there are some situations when it makes sense to hold on to your life insurance policy, don't keep on paying simply because the amount is automatically deducted from your checking account every month.

Call up the car insurance agent. Now that you won't be commuting, you should ask for a low mileage discount. Other options you might have opted to pay for, like being reimbursed for a rental car, may not be necessary now that your family doesn't absolutely need both cars operational every single day. There might be other discounts as well. The bottom line is that a phone call could save you hundreds of dollars every year. Call now.

Seek out senior discounts. Join AARP and take advantage of the numerous discounts available to seniors. Be on the lookout for senior rates on everything from public transportation to movies to museum admissions. Senior discounts are a major advantage of getting older.

Plan your schedule. The happiest retirees often have their schedules filled with activities. From hobbies to outings with friends to volunteering, retirement doesn't necessary mean sitting at home all day and doing nothing. Retirement is not the end of your career, but the start of another chapter in your life.

Decide if retirement will make you happier. If you are not ecstatic about leaving the workforce, I would argue that you aren't quite ready for retirement yet. Meeting your retirement needs is much more than just having the financials figured out. If you aren't ready yet, then stop counting the days until you retire and start figuring out what you are missing. Make more friends, develop hobbies and find a purpose in life. These things won't magically appear for you the day you retire.

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