Take These 14 Steps 3 Months Before You Retire

You’re counting down the days until you get to spend your weekdays hitting the links, taking care of your grandkids, or planning your cross-country road trip.

While you’ve been making smart financial decisions to set yourself up in the most advantageous way, there are still loose ends that will need to be tied up as you approach that first day when you wake up without an alarm clock.

Want to start mapping out the last three months before you retire? Here are the 14 steps you need to know.

You’re likely not going to make any major moves in these last three months, but it doesn’t hurt to sock away as much as possible while you still have a 9-to-5 income.

Max out your retirement accounts, put money in a high-yield savings account, and do anything you need to quickly save as much as possible. You’ll be glad you did.

You’ve likely been monitoring your financial situation for years and running various retirement scenarios, which is how you’ve come up with your retirement date. 

But now that the end of a regular paycheck is just months away, it’s time to run a few more calculations to understand precisely where you stand now.

This will give you a better idea of what the next few decades will realistically look like and whether getting a retirement job might be a good idea. 

If you need some third-party reassurance, meet with a financial planner to be sure you’ve taken everything into consideration.

Once you know where you stand, you have the knowledge you need to make a budget that lines up with the money that is actually available to you each month.

Take into account any income streams, pensions, or other sources of monthly revenue, then make a realistic budget that includes your basic needs and expected expenses for travel, hobbies, or entertainment.

If you’re one of the 4% of American workers enrolled in a pension plan, now is the time to decide how you want to receive your pension. You may have a choice between monthly or regular payments or a lump sum that can be invested in an IRA.

Consider how you want to take the money and what would make sense for your age and lifestyle.

You can’t make a budget without knowing how much money is coming in the door. You can easily estimate your monthly Social Security payment by looking at your most recent Social Security statement on the Social Security website. This will give you exactly the information you need.

And if you haven’t done so yet, set up your mySocialSecurity account so that you can get accurate information and use the tools they provide anytime.

As you get older and closer to retirement, you want to transition away from a high-risk portfolio allocation.

While you don’t want to move out of stocks entirely, you should focus on lower-risk, reliable stocks, bonds, and mutual funds that will continue to help you grow your nest egg over the years.

Your retirement accounts are ideally designed to last throughout your retirement. Do you know how much you’ll need to withdraw each year and the tax implications?

Consulting with a financial advisor or accountant can help you decide how much you will need to withdraw and how much tax you may pay.

Creating a plan for withdrawal will help you stay focused on growing, not shrinking, your accounts.

If your goal is to stay in your home as long as possible, then it may be worth getting a quote on transitioning your home to accommodate aging in place.

These moves are best made before you need them rather than after a medical incident when you need to figure out how you can stay in your home.

Just because you’re retiring doesn’t mean you’re waving goodbye to goals.

Many people want to dabble in part-time consulting to stay connected to old colleagues and friends and continue exercising their brains. Or maybe you will want to try something new with a part-time job.

Set your goals and pursue your hobbies to ensure you have activities that continue to help you feel productive and valuable.

If you’re retiring over age 65, then you can turn to Medicare. But, if you’re one of the lucky ones who plans on retiring before 65, you’ll have to look at other options for your health care.

It could be a spouse’s plan, COBRA could work for 18 or 36 months, or there’s the Affordable Care Act. However you expect to get health insurance, make sure you have a plan before your employer’s health coverage ends.

Start looking at the best vehicles for tax savings on your retirement accounts now. You’ll want to diversify across several different types of accounts, including taxable and tax-advantaged accounts.

Your portfolio plan is best worked out with an accountant or a financial advisor. How you handle taxes now can have a major impact over time.

If there was ever a time to meet with a financial advisor, this is it. You two need to schedule time to sit down and discuss your plan, your accounts, and everything in between.

You don’t want to retire already feeling behind, and a financial advisor can help you optimize your plan for the time you choose.

If you haven’t done so by now — and you should have — create your mySocialSecurity account on SSA.gov. You can check your estimated benefits and use tools and FAQs that the website provides to help you navigate an important part of your retirement income.

If there is any incongruence between your budget and what you’d like to spend, consider lining up a part-time job after you retire.

It doesn’t need to be in your field. You might enjoy working at a craft store or teaching at a preschool. You might work at a golf course, make some extra money, and play golf. Just find something that pays enough to help cushion your monthly income.

Ideally, you retire thinking you’ll relax rather than worrying about how you will comfortably live. If you're concerned about your budget, consider how you may be wasting money, and stop making those financial mistakes.

Following these steps three months before retirement may give you confidence that you’re ready and help you ease into retirement.