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5 Things You Need to Consider Before You Retire

By Deborah Jeanne Sergeant

You likely have many plans for after retirement — travel, hobbies and some much-needed R&R — but area financial experts say that before you enter that phase of your life, you have a few steps to ensure your financial security.

1. Pay Your Debts First

“Retire with no debt and have a low withdrawal rate of investments — ideally 4% or less — but at least have a minimum two-year income bucket of cash and short-term instruments so you can lower or stop withdrawals from investments when markets are down for extended period. You can be nimble in lousy markets.”

George R Allen, certified financial adviser, Wealth Management Adviser with Northwestern Mutual in Oswego.

2. Take a Long Vacation Before Retiring

“Before that last paycheck comes in, I encourage my clients to envision what their retirement will look like. Will they travel? Take up a hobby? Move closer to family? It is a big adjustment to go from working to retired. We are programmed to thrive in structured environments. Without a plan in place, people can struggle to find a sense of purpose and when that happens it is very easy to fall off track financially. Pre-retirees should prepare for the transition. Planning to take an extended vacation or a longer block of time off work before any retirement papers are processed is a great exercise to see whether they are ready.”

Sonnet Loftus, certified financial planner, Michael Roberts Associates, Inc., East Syracuse.

3. Plan How Much Money You’ll Need


“As one approaches retirement it is a very good idea to create an itemized cash flow worksheet to analyze the amount of money that will be needed to sustain one’s lifestyle during their retirement years. Not enough people make the effort to determine this number but it can be very helpful in establishing how much income is needed from retirement investment capital to supplement pension and Social Security income sources. By developing this cash flow need, adding inflation for future consumer prices and incorporating a risk-adjusted rate of return on invested capital, an analysis can be done to determine the ability to sustain one’s retirement capital over their expected lifetime period. A thoughtful cash flow analysis informs wise distribution and investment planning during the retirement years.”

Randy L. Zeigler, certified financial planner, Private Wealth Adviser, Ameriprise Financial Services, Inc., Oswego.

4. Consider Health Insurance Costs

“Understand how you are going to pay for health insurance or bridge the gap to Medicare. If you are retiring before age 65, you will need to find your own coverage and it can come at a significant cost. Working with an independent health insurance agent can be a helpful way to understand and explore all options and find a plan best suited to your needs. You don’t want to retire only to find out that the cost of health insurance is not sustainable within your budget.

Leyla Z. Morgillo, certified financial planner, associate adviser, Madison Financial Planning Group, Syracuse.

5. Wait to Collect Social Security

“Be thoughtful about how to take Social Security and do not be too hasty in taking benefits if you can afford to wait. The decision of when to turn on benefits should also be approached as a joint decision for those who are married, as the decision of one spouse does impact the other. Further, the cumulative benefit of waiting until full retirement age or delaying to age 70 can be staggering for those who expect to live well into their 80s. Working with an adviser to do analysis is highly recommended to make sure you are maximizing your benefits and exploring all possible strategies.”

Leyla Z. Morgillo, certified financial planner, associate adviser, Madison Financial Planning Group, Syracuse.