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Things to Know Before you Retire

These are some of the things everyone should know and consider before they retire.

Some people consider retirement as a time to enjoy the reward of their constant hard work, while it can trigger stress and depression for others. But do you know everything you need to know before you retire?

Not having to wake up early in the morning, get dressed up, and get ready for work is a clear benefit. Moreover, having the time to enjoy your life savings and living in comfort might not go well if you are unprepared for all the important things.

There is a lot to consider before you retire. Do you have enough investments or savings to live the lifestyle you want? Is your debt under control and payable? Do you have a plan for retired life?

Fret not, we have got you all covered with a list of things to know before you retire.

Calculate the Numbers Before You Retire

Everyone eventually wonders, ‘How much do I need in order to retire?’ The answer to that question is very complicated and different for every individual. We all live different lifestyles, in different places, and have different expectations with retired life. You need to review your savings and budget to understand if you can continue living the life you want even after retirement.

How much have you saved up in your retirement account? Will you have any retirement income, and if so, how much? Planned for healthcare costs in the future? You need to take time out and crunch these numbers to plan for your retirement. Working with a financial planner is always a good idea. They can help better your portfolio for retirement. There are also social security calculators available online to help you calculate and determine if you have enough money to finally retire and live comfortably.

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Don’t Just Jump into Retirement

Don’t leave your long-term employment before knowing and understanding what comes next. Firstly, if you give up your employment, you lose all the benefits that come with it. You’ll lose your health insurance, and you stop adding to your retirement account. Also, if you quit and retire before calculating how much money you actually need for the standard of living you want, finding a job and getting hired again can be difficult.

Bankrate found in a study in 2018 that more than 50% of baby boomers (people born between the 1940s and 1960s) miscalculated or misjudged how much money they needed for retirement. Losing opportunities to grow your post-retirement funds and losing all health and social benefits of having a job is why you shouldn’t just jump into retirement without considering everything.

Are Your Investments Diversified and Growing?

You might be tempted to take all your investments out of stocks and bonds to reduce the risks at your later stages in life. But you should highly consider diversifying your investments into a mix of stocks, mutual funds, bonds, and assets as much as you can. Consolidate your assets and, if possible, have an investment policy statement in place.

Diversifying and consolidating your investments and assets will help you greatly if you ever experience any hard times. Investments also mean you keep generating a good income to continue living the standard of life you have. Just make sure to invest in places and assets that meet your liquidity needs.

Pay Off Debt and Big Expenses Before You Retire

If you have any debts, you should pay them off before retiring. If you want to make any big purchases, like a new vehicle or a home renovation, make sure to do it before retirement. These non-essential expenses should be done before you retire, as you don’t want to waste any post-retirement savings.

Debts become much harder to pay off when you don’t have a stable income coming in from a job. Furthermore, big expenses also put a much bigger dent into your budget when you don’t have an income. This is why you should prioritize paying off debt and big expenses before retiring.

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Written By

Travis Barnett is an expert in finances backed by 10 years of experience as a financial analyst at CNB. He graduated from UCLA's Anderson School of Management in 2010 and has been in the field ever since. Travis now enjoys sharing his business experience with others as a financial writer in San Diego. In his spare time, he enjoys hitting the links and working on his golf swing.


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