Am I Ready to Retire?

The following guest post comes from Ed Carlson. Ed is a retired Healthcare CFO (and my father) who is spending his time during retirement helping others prepare for the financial, estate planning and healthcare issues that arise once you leave the workforce for good. Ed is a Certified Senior Advisor (CSA). 

The good news is there is an amazing amount of information on retirement available on the Internet. The bad news is there is so much information it is difficult to know where to start.

In this article I will pose a number of questions that can point you in the right direction, and identify the issues that will help ensure you have a plan for a worry-free and enjoyable retirement.

There are also budgetary and investment management issues to deal with, but I wanted to focus on many of the details that are often neglected when preparing for retirement.

1. At what age and when do you want to retire? What do you want do in your retirement?

2. Do you have any pensions that will pay you a fixed monthly payment?

3. At what age do you plan to start collecting Social Security? Have you estimated your Social Security payments? (The website has a very easy and helpful way to estimate your payments and is highly recommended).

4. If you retire before age 65, what health insurance coverage will you have?

5. Will your mortgage be paid off when you retire?

6. Do you have an emergency cash fund (6 to 12 months expenses) in place?

Estate Planning
1. Do you have a will?

2. Do you have the following in place?

  • Healthcare Power of Attorney
  • Financial Power of Attorney
  • Living Will (5 Wishes)
  • Funeral/Burial Plan

3. Have you completed/updated beneficiary forms for life insurance policies, and 403(b) or 401(k) plans?

4. Who is listed on your home and other real estate holdings as the owner? In many States a Lady Bird deed will accommodate adding other individuals as property owners, and give the owner/grantor protection against things like joint owner creditors, and avoid the probate process. This can ease the burden on your beneficiaries.

If you can answer “yes” to most of these questions you are in pretty good shape for that worry-free retirement. If you have a number of “no” answers don’t despair, these are not onerous tasks to complete.

I suggest starting in the estate planning area. Your best bet is to meet with an attorney who can help you prepare the Powers of Attorney and Will.

At the very least get a copy of a will on-line, complete it, and give it to a couple family members and close friends. Make sure those beneficiary forms are complete and up to date, as these forms take legal precedence over a will and powers of attorney.

Through a Living Will you can also deal with your end-of-life issues by completing and sharing with family members a 5 Wishes document (learn more about the 5 wishes document here).

While it would be nice to spend all of your time as you approach retirement thinking about all of the trips you plan on taking and how you will spend your free time with family and friends, these issues will only grow in importance as you age.

The best advice is to pick 1 or 2 issues per month; complete them and move on to the next issue. Completing these tasks incrementally will help you from becoming overwhelmed and keep you on track.

Then you can spend all the time you want thinking about travel, relaxation and enjoying all of your free time.

Follow-up note from Ben: Although these issues seem to concern only those that are fast approaching retirement age, they can also be useful for others that are thinking about early financial independence someday. It’s not exciting to deal with these topics, but it’s important to have your entire house in order so you can worry about more important things.


What's been said:

Discussions found on the web
  1. My Own Advisor commented on Oct 23

    Good questions.

    1. Age 55.
    2. Yes, 12 years into pension. I hope to have a 25 years pension but we’ll see….
    3. I hope to take government program payments at age 60 (the earliest I can).
    4. I will have my own health insurance.
    5. Yes, hopefully in 8 years in my 40s.
    6. Yes, > $5,000.

    Yes, wills.
    Yes, all powers of attorney in place.

    Getting there 🙂

    • Ben commented on Oct 23

      That’s impressive Mark. Sounds like you are well on your way and have already put a lot of thought and effort into this.

      Nice to have those things out of the way or planned so you can focus on your investments.