Organizing your finances for the future

Staying on top of your financial life is important, especially if retirement is around the corner.

Here’s how you can start tidying up your retirement finances:

Know where you stand

At least five years before retirement, get a handle on all the sources of retirement income you have, including Social Security, employer plans, pensions and annuities, in addition to your own personal retirement savings. A financial advisor can help you evaluate whether you’re on track or if you might need adjustments to your plan, either by turbo charging your savings or working a few years longer.

Plan your Social Security strategy

While you can take Social Security as early as age 62, doing so locks you into a 30 percent smaller benefit if your full retirement age is 67.1 You can score an even bigger monthly benefit by waiting longer. By waiting three more years, you will increase your Social Security benefit by 24 percent.2 Waiting to collect Social Security benefits could help fill in future income gaps in retirement. 

Review your retirement plan with your financial advisor to determine what is the best age for you to start collecting Social Security.

Mind your health care insurance

Do you know the biggest expense in retirement? No, it’s not golf club fees or plane tickets to see the grandkids. It’s healthcare. Yet many people don’t plan for it. A healthy 65-year-old couple that retired in 2016 can expect to pay $266,0003 for medical expenses. Make sure you sign up for Medicare as soon as you’re eligible, starting at age 65. A robust Meidcare supplemental insurance plan (commonly known as Medigap) can help pay for the portion of medical costs not paid for by Medicare, as well as coverage for prescription drugs.

Take retirement for a test drive

Once you leave the workplace, it’s up to you to replace your paycheck. Naturally, if your retirement income isn’t as much as you were earning before, you might need to pare down. If you know you’ll be living on less when you stop working, make those adjustments now so it won’t come as a sudden shock when you do retire.

Prepare for market volatility

Retirement is full of risks and one of the biggest is the performance of your portfolio. As you approach retirement (and have fewer years to recover from market drops), you should take another look at the risk level of your investments, and possibly consider less volatile options.

Decide if you’ll work

Retirement is supposed to be the end of the daily grind. Working part-time or having a side business could help make ends meet if your post-retirement income stream isn't quite what you want it to be. Don’t wait until after your retirement party to look for work. It’s easier to line up a job if you’re still employed.

Review your Required Minimum Distributions

The year you turn 70.54 you must take required minimum distributions from your 401(k) or IRA (unless they are Roths) and start paying income tax. Failing to take your distribution comes with big fines. You’ll be charged 50 percent5 of the amount you’re supposed to take plus whatever tax you owe. Because 401(k)s and IRAs are often a main component of many retirement plans, it's important to know how much you are required to withdraw so you can avoid incurring a fine or unintentionally tapping into future retirement savings.

When it comes to financial planning, it's key to stay organized. Speak with a financial advisor to learn how you can get your finances in order, so you can turn your attention to what really matters—enjoying retirement.


1“Retirement Planner.” SSA. April 4, 2016.
2“Effects of Early or Delayed Retirement on Retirement Benefits.” SSA. August 19, 2010.
3“2015 Retirement Health Care Costs Data Report.” HealthView Services. March 2015.
4“Retirement Topics - Required Minimum Distributions.” IRS. Accessed July 28, 2016.,-Employee/Retirement-Topics-Required-Minimum-Distributions-%28RMDs%29
5“Retirement Plan and IRA Required Minimum Distributions FAQs.” IRS. Accessed July 28, 2016.