Here’s Your Pre-Retirement Checklist

Are you within a few years of retirement? Time right now to get your financial house in order and here’s what to include on your pre-retirement financial checklist.


You need to determine if you want to leave the plan and its assets with your soon-to-be-former employer, roll assets into an individual retirement account or take a distribution (the last choice likely results in a hefty tax bill).

Do you have company stock options you didn’t exercise? Check the regulations to formulate your options. Special rules on net unrealized appreciation may also apply to company stock that increased in value while in your 401(k).

Your 401(k) plan might be your largest and most significant employee benefit but consider others as well. Does your company offer any retiree medical coverage? Can you continue other benefits at reduced group rates?


You might face several decisions if you’re fortunate enough to still have a pension.

  • Do you take the benefit at retirement or wait?
  • Take the pension as a lump sum and roll it over to an IRA or take it as an annuity with monthly payouts?
  • Which of several annuity payment options is right for you?

Make these decisions in the context of your overall financial situation and your ability to effectively manage a lump-sum payout. Also, any lump sum incurs taxes; you usually want to roll it into a tax-deferred account such as an IRA.

If you earned a pension benefit from a former employer, contact your old company to get the details and to ensure the company knows your current address and contact information. You want no delays or glitches when you start withdrawing this money.

Determine Social Security benefits

You can start taking Social Security at age 62 – but doing so significantly reduces your monthly benefit as opposed to waiting until your Full Retirement Age (67 for anyone born after 1960).

If you wait until 70, your benefit level continues to grow. If you’re married, plan for the benefits of both you and your spouse.

Review financial resources

Over the course of your working life you likely accumulated a variety of investments and other assets that can fund retirement:

  • Your 401(k) or similar retirement plan, such as a 403(b) if you worked for a tax-exempt organization or other defined-contribution plan.
  • IRA accounts, both traditional and Roth.
  • A pension.
  • Stock options or restricted stock units.
  • Social Security.
  • Taxable investment accounts.
  • Cash, savings accounts, certificates of deposit and similar savings vehicles.
  • Annuities.
  • Cash value in a life insurance policy.
  • An inheritance.
  • Interest in a business.
  • Real estate.
  • Income from working into retirement.

Well before retirement, review all of your anticipated assets and determine how you can best use them to support the lifestyle you want.

Determine how much you need

Basically, put together a budget. Will you stay in your home or downsize? What activities do you want to engage in? What will your basic living expenses be?

Compare this with income that your various retirement resources might generate and you get a good idea if you can support your desired lifestyle in retirement. Further, plan which financial resources and accounts to tap at various stages of your retirement.

The golden years can be a great time of life but you need proper planning to help build your financial success.

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Written by Roger Wohlner, CFP, a fee-only financial adviser at Asset Strategy Consultants based in Arlington Heights, Ill., where he provides financial planning and investment advice to individual clients, 401(k) plan sponsors and participants, foundations, and endowments. Please feel free to contact him with your investing and financial planning questions. Check out his Financial Planning and Investment Advice for Individuals page to learn more about his firm’s services. Roger is active on both Twitter and LinkedIn. Check out Roger’s popular blog The Chicago Financial Planner where he writes about issues concerning financial planning, investments, and retirement plans. He is also a regular contributor to the US News Smarter Investor Blog and has been quoted extensively in the financial press including The Wall Street Journal, Forbes and Smart Money. Roger is a member of NAPFA, the largest professional organization for fee-only financial advisors in the country. All NAPFA Registered Advisors sign a fiduciary oath promising to act in the best interests of their clients.

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