Getting ready for retirement? Planning for a financially secure retirement can be overwhelming and confusing. Making sure you’ve got the right things in place and preparing ahead of time for a secure retirement can save you from unexpected disappointments and unpleasant surprises. If you’re getting started or just want to confirm if you’re on track with your financial retirement plan, we’ve pulled together handy Retirement Financial Planning checklists to help you better prepare and be ready for your retirement.

Check Your Retirement Income Sources


Where will the money for retirement come from?  How much will each source provide and for how long? Confirm what retirement savings and income sources you can count on such as the following:

  1. Social Security — You can get estimates of your benefits (retirement, disability, and survivors benefits) by visiting the Social Security Administration’s my Social Security website and creating an account (get someone to help if necessary). Once you’ve done that you will have access to your benefit estimate and earnings statement as well as Medicare taxes you’ve paid.
  2. Pensions — To find out about your pension you can use a few helpful resources such as:
  1. Annuities
  2. Life insurance values (if there are any)
  3. Savings and including an emergency savings fund (to bridge the gap of time before you start receiving your retirement benefits)
  4. Income from investments and retirement funds (including, stocks, bonds, trusts) or possibly real estate (rental income)
  5. Value of real estate or personal property (vehicles, jewelry, gold, collectables, etc.)

Figure Out How Your Retirement Income Will Be Taxed

The gross-value of your retirement income is often (mistakenly) used by many to estimate what money they will have available. The taxes on your various sources of retirement income need to be confirmed so you can have a realistic idea of your retirement income. You don’t want to be surprised and left short when the time comes for retirement.

Social Security Income

Social Security income may be taxable depending on the amount of other retirement income you have. You may have to include up to 85% (ranges from zero to 85%) of Social Security benefits on your tax return as taxable income. A tax worksheet formula takes into account your ‘combined income’ to determine how much your benefits will be taxable each year.

Having a high amount of monthly pension income can result in a high tax on Social Security benefits. Only those the other hand, a retiree with virtually no other retirement income, will most likely get their Social Security benefits tax-free and not pay income tax.

IRA and 401(k)

Withdrawals from retirement accounts are taxable. This means IRA withdrawals, as well as withdrawals from 401k plans, 403b plans, 457 plans, etc., will be considered taxable income. Again, the amount of tax you pay depends on your total income, which deductions you have and the tax bracket you fall into that year. For example, if you have significant medical expenses, you will also have more deductions than income so you may not need to pay tax on those withdrawals during that year. Keep in mind Roth IRA withdrawals are tax-free if done correctly.


When calculating whether your pension income is taxable, you need to check if the money went in pre-tax or after paying taxes. Most pensions accounts were paid in with pre-tax income so will be counted as taxable income on your income tax report. If you already paid tax on the money you put into your pension, then you won’t pay again in retirement.

Annuity Distributions

There are various types of tax rules depending on the type of annuity you have. An IRA or another retirement account annuity is taxed differently than if you purchased an annuity with after-tax dollars (not within an IRA or retirement account).

Immediate annuity payments are taxed on the interest portion of each payment you receive. The annuity company can tell you what your “exclusion ratio” is and how much of the annuity income you received can be excluded from your taxable income.

A fixed or variable annuity is set up so when you take withdrawals, you initially receive the part from earnings or investment gain and is considered as taxable income. Eventually, you’ll be withdrawing the value of the original contributions you made, and those payments won’t be included in your taxable income.

Investment Income

During retirement, you may still pay taxes on capital gains, interest income, or dividends. The financial institution that holds your investment income accounts sends you the information that you need to report on a 1099 tax form each year. You could qualify for the zero percent capital gains tax rate in that year if your other retirement income sources are not very high. There is a way to minimize your taxes on capital gains and losses if they sit outside of a retirement account. An accountant or financial consultant can advise you how to reduce the taxes on your investment income.

A bank CD is an investment that is not entirely counted as taxable income. When the CD matures only the interest portion is counted as taxable income and the remaining amount can be used as tax-free income.

Sale of Your Home (Gains)

The gains from selling your home may be tax-free if you have lived there a minimum of two years and are less than $250,000 if you are single or $500,000 if you are married.  Sale of a home you rented out will have different tax rules on the gains so you may need some tax advice on how to report that on your income tax.

Your Retirement Tax Rate

Depending on your total amount of income and deductions you can estimate the tax rate. First, list each type of income, how much will be taxable and then add them up. Then subtract your expected deductions and exemptions.

Determine Your Retirement Expenses

Now that you’ve checked and calculated your estimated retirement income you can move on to the next important item, expenses. Indeed, how much you need is based on what you’ll be spending and you can see how well your estimated retirement income accommodates that. This way you’ll be able to check if you fall short and make any adjustments to your retirement planning goals. Make it a habit to re-do this year before your retirement kicks-in of staying realistic about your budget. Here are the typical things to consider when calculating a retirement budget.


Housing Expenses

Are you renting or do you still have a mortgage? Your retirement plan should include paying off your mortgage as much as possible before retirement. Ideally, you should be mortgage-free before you retire to reduce the financial strain on your retirement budget.


Credit Card Debt and Loans

Again, make it a goal to start retirement debt-free. Your retirement plan should focus on eliminating debt before your retirement begins.



Include property taxes and estimated yearly income taxes.


Health Care

Medicare kicks in at age 65, but you can count on it only covering approximately half of your total health care expenses. It’s estimated that you can spend between 11% and 16% of your after-tax retirement income on expected health care expenses. It’s important to have the proper medical health coverage in place during retirement to avoid having medical debt. Look into getting some additional medical insurance coverage to keep you better covered and include this in your retirement budget. Include out-of-pocket costs such as any dental, vision, and prescription drugs. There are tools such as One-Click Health Estimator on the Health View Services website to help you calculate your future retirement health-care expenses.



Include all the different types you will have such as home insurance, property insurance, life insurance, long-term care, vehicle insurance, travel insurance, etc. (except health insurance if you’ve counted under health expenses).


Living Expenses

Include your utilities, (phone, cell phone, Internet, cable, heating, telephone, water, electricity bills as a guide to estimate) maintenance, clothing, and accessories, groceries, transportation. Collect and review your receipts and statements from the last few months to give you an idea of your average living expense amounts.


Leisure Expenses

During your retirement, you’ll have more time to dedicate to your favorite pastimes, hobbies and recreational activities. Include what you expect to spend on fitness, travel, hobbies, pets, dining out, subscriptions and anything else you can think of. Include a gift-giving amount (don’t forget to include any new grand-kids down the road)

Setting A Retirement Date

After going through the above checkpoints, you should have a better idea if you are ready to retire. Knowing when it’s the right time to retire can depend on a few things such as the following:


Do You Have Enough Saved for Retirement?

You’ve calculated your retirement income sources, applicable taxes, and a retirement budget. So, what’s the verdict? Do you think your nest egg is sufficient? If you are not in the best financial shape, you might want to consider pushing forward your retirement date a few years and keep working (even part-time) to reduce any existing debt and increase your savings. This is where a financial advisor can help you weigh the pros and cons of retiring later, delay taking some retirement income such as Social Assistance and re-allocating your savings into more profitable retirement investments.


Are You Ready Emotionally to Stop Working?

For some people, their work and personal identity are very closely connected. If your closest friends are your work colleagues, you may want to continue working for a few more years or scale back and work part-time if possible to ease into a new retirement lifestyle. Having some extra free time while still working can give you the chance to get involved with other people and activities outside of work. This will help you build up your retirement network of friends.


Time for Your Significant Other

If you and your partner plan to retire at different times there may be the need to adjust your daily schedules and domestic responsibilities. If one is still working, they may not be available to do all the things together. It’s important to have a plan that works for both of you. That may even include the delay of full-retirement for one spouse until the other is ready to retire. Whatever you decide to look at what you’d like to do during retirement and the goals you have each or together as a couple.


Your Retirement Wish List

For many people, their goals for retirement include more than just gardening, golf, and travel. Some decide to pursue lifelong dreams and projects such as starting their own business, writing a book, starting a charitable organization or just following their passion. If you have clear goals and a strong motivation for your retirement lifestyle that includes meaningful activities and projects, should help guide you in picking the right time to kick-off your retirement.

Making sure you’ve got the right things in place and preparing ahead of time for a secure retirement can save you from unexpected disappointments and unpleasant surprises.

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