15 CFPs share their best advice

5 Things To Do Before You Retire

by Kristen Sturt, Grandparents.com


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Thanks to an entire internet worth of articles and financial advice, we know what to do in the years leading up to retirement. But what about immediately afterwards?

We asked 15 Certified Financial Planners (CFPs) to tell us the five things you must do upon leaving the workforce for good and one you should wait on. It turns out that celebration, preparation, and even hesitation go a long way.

"Look before you leap is definitely the mantra," says Eleanor Blayney, Consumer Advocate for the Certified Financial Planner Board of Standards. "Retirement can be a wonderful period of life, a time of tremendous fulfillment and enjoyment, and planning will make your ability to enjoy it so much greater." Read on for our findings.

1. Treat yourself

First thing's first. On the way out the door of your office, "Buy an expensive bottle of wine. You've retired! Congratulations!" says Paul Wilson of Schwarz Dygos Wheeler Investment Advisors LLC in Minneapolis. "Take a moment to savor the feat, reminisce, and look forward to the future you've been working towards for years."

And the next day? "Take a special vacation trip or visit someone," suggests Anja Luesink of Luesink Stenstrom Financial in New York City. "This will make the transition from work to retirement go smoother. The break with the routine is not so abrupt."

Another advantage to the trip: "It gives you the breathing space before you return to the work of deciding how you want to spend your time for the next 20 to 30 years," says Blayney. If you've always dreamed of spending a week exploring Iceland, there's no better time.

2. Review your income streams

Now that the party's over, it's time to get down to business. Ideally, you should have an income strategy before leaving the workforce, including a blueprint for withdrawing Social Security. Once you actually retire, however, you must double-check where your finances stand, and confirm that all plans are up to date. "Make sure you have your cash flow in order," advises Cameron Hendricks of Financial Symmetry in Raleigh, NC. "Know how much income you will have and where it will come from (pension, social security, retirement accounts, part-time job)."

While you're reviewing (preferably with a financial planner), be aware of the potential volatility within your portfolio, the tax implications of all your different revenue streams and disregard CNBC and FOX Business. "During the initial phase of retirement, it's best to ignore the 24/7 news cycle," says Allison Alexander of Savant Capital Management in Rockford, IL. "News outlets are vying for attention, and as a result, their headlines are designed to appeal to an investor's emotion rather than logic. Hold the course on the financial plan you have set for yourself in retirement."

3. Start tracking your new daily expenses

Now that you're not working, your daily expenditures will change, possibly drastically. "I tell new retirees that it can take a year or two to adjust to retirement and really know what you will spend on average," says Cheryl Sherrard of Clearview Wealth Management in Charlotte, NC, "and you need to know what your retirement income can support, even in bad market years."

So, from Day 1, "Prepare a reasonable budget of your monthly expenses now that you are living on your post-retirement income and retirement savings," Natalie Colley of Francis Financial in New York City. "A rule of thumb is that you shouldn't pull more than four percent from your retirement savings each year."

While a pen and paper always works for this, financial software can significantly ease the burden of bookkeeping. Jim Miller of Woodward Financial Advisors in Chapel Hill, NC suggests, "Use Quicken and automate your expense tracking, so you know where your dollars are going and can find ways to save money if needed down the road."


4. Revise your estate plan

As we age, illness and incapacitation become more serious concerns. With that in mind, says Wilson, "Update your estate plan. Chances are you haven't looked at your will in years, perhaps decades. Your adult children likely wouldn't appreciate having a guardian anymore."

Your will (living and otherwise), insurance beneficiaries, medical directive, and power of attorney should be reviewed, and then reassessed every three or four years after that. That is, "unless something significant happens - if you move to a different state, if there's a change to any kind of marital status in your family, etc.," says Blayney. In that case, start drawing up new documents immediately.

Here's one special note. Checking your estate plan review is vital for retirees who want to spend significant time abroad. Accidents happen overseas, and it's much more difficult to coordinate critical documents and directives from a distance.

5. Fill your calendar with meaningful activities

Why did you retire? Now is the time to discover the real reason. "Find your passion," urges Sherrard. "I've seen too many individuals retire 'from' something and not 'to' something. While it takes everyone time to get used to retirement, you have to find a reason to get up in the morning, whether it is volunteering, gardening, finding a part-time gig, etc."

Will you leave
thousands of dollars on the table
by taking Social Security
at the wrong time? Find out.

Whether your passion lies in genealogy or card games, make sure it involves the following key elements:

  • Connecting with others. "Get involved in meaningful activities that will keep you connected to friends, family, and the community," says Allison Berger of Raleigh's Financial Symmetry. You'll feel valued and stave off the loneliness (and related health issues) that can accompany retirement.

  • Making concrete plans. "Many are surprised that their goal of golfing in retirement still leaves significant empty space on the calendar," says Sherrard. "I encourage people to consider an exercise where they [fill in] a blank weekly calendar, hour by hour." Seeing that schedule gives you a realistic view of your commitments, provides specific events to look forward to, and prevents aimlessness.

DON'T make big decisions, especially about housing.

"Retirement is a big change and new retirees should expect to spend some time adjusting," says Colley. "While downsizing and making other lifestyle changes can be a fun and sometimes necessary part of retirement (i.e. to lower the cost of living), this is something that can be put off for a year or more to ease the adjustment period." Instead of buying a new place or paying off the old one in one fell swoop, Colley suggests taking time to consider your new needs: "Do you still need to live in a spacious home? Should you downsize to help with your retirement expenses, move to be closer to the grandkids, relocate to a sunny locale or a less-expensive state?"

Another big decision to put off? Making large cash donations to your kids and grandkids. "[Postpone] contributing to a grandchild's 529 plan or other form of gifting to your grandchildren," says Hendricks. "Make sure you have your personal finances under control first."


This article comes courtesy of Grandparents.com, site of the American Grandparents Association. Visit their site for How to Avoid Being Broke in Retirement and 6 Best Cities for Singles over 50.

Take the Next Step:

  • Turn this article into a 'bucket list' as you get ready for retirement (or a post-bucket list if you've already retired!)
  • Visit the TDS library for more on life during retirement.
  • Just because you retire, it doesn't mean that your strengths retire with you. They could actually be put to good use in your new found retirement life. Find out here how to put them to good use.

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