Financial Planning Doesn’t End with Your Career: A Checklist for Retirees

Financial planning doesn't end when you retire. In fact, it is crucial to continue keeping track of your finances post retirement. After all, you don't want your nest egg to run out prematurely. While you've already done the heavy lifting, it's important to continue reviewing your finances. Never opt for putting financial planning on autopilot—there are many changing variables that can influence your spending, and it could hurt you if those changes came as a surprise.

The following checklist can help you keep track of the health of your retirement fund:

  • Do a year-end evaluation of your finances. A lot can happen in a year: new tax laws, health care changes and life events such as divorces or deaths. All of these can affect your retirement savings. By doing a year-end review, you can make financial modifications to adapt to these changes. In addition, take note of your expenses so you can make any necessary adjustments to your lifestyle. Make sure that you don't spend more than you can afford.
  • Consult with your financial planner to ensure that your investments are on track. Generally, in the retirement years, a portfolio will be allocated conservatively to provide income while protecting against inflation. An annual meeting with your financial planner can help you stay on track with your financial goals.
  • Take special note of Medicare. The federal government's health-insurance plan for ages 65 and above can change year after year, which can come in the form of increased premiums and deductibles. In 2016, for example, Medicare has a number of changes, including increased Part B premiums for several categories of people. It's important to keep up with changes to Medicare so you can make the necessary adjustments to your budget.
  • Review your paperwork. Review your insurance plans and legal documents such as living wills and powers of attorney yearly. Some may need updating depending on changes in your family, such as divorce. Make sure your estate plan is in proper order, and consult your financial advisor if you have any questions.
  • Know your income streams. Take into account your earnings from your 401(k) and other retirement plans, as well as the sale of properties or other assets, as all of them can increase your annual net income and subject you to more taxes. Options to counteract increased earnings may include recharacterizing your income or gifting appreciated assets.

Bottom line, periodic reviews of your finances can be crucial to maintaining an enjoyable and stress-free retirement. Financial checkups and proactive adjustments can help you stay in control and prevent you from being caught unaware by life's changes.