Creating a 10-year action plan for retirement

FRIDAY, DEC. 14: Once you reach 50 years old, you should begin to think about your retirement and how you can turn your vision into a viable retirement plan. 

Starting with your current financial situation, pay particular attention to how you can begin to maximize your income by streamlining your expenses.  

Most people who start planning for retirement begin at least 10 years in advance of the event. 

Below is a helpful checklist of points you need to address. Note that this is to give you an idea only and should not be construed as the only areas that must be considered.

A retirement planner will help you with most of the steps and advise you on the best course of action to take.

10 years to retirement date

a) Meet with a retirement planner and create a retirement plan; it will give you the ability to have your retirement goals mapped out financially.

b) Apply for membership with Age Concern; they will give you an idea of the benefits available for persons aged 50 and over.

c) Review your company pension plan(s).  If you have multiple pensions from previous employers, this is a good time to begin consolidation into a single pension plan (i.e. individual pension plan).

d) Review your bank account(s); how many do you have and how many do you really need?

e) Review your investment account(s); look at the asset allocations and make sure they are well-diversified.

f) Review your insurance policies (i.e. life, home, car). Do these values reflect your current needs or current asset values?

g) Update your will or visit a lawyer to get a will in place; make sure your estate is dispersed the way you want.

h) Update your beneficiaries on anything that has a listed beneficiary i.e. life insurance, pensions etc.

i) If you still owe on your mortgage, it’s time to focus on how you will pay it off before retirement.

j) Look at your cash flow. Can you decrease your expenses and increase your savings?

5 years to retirement date

a) Review the next course of action with your retirement planner. Are you in a good place financially?

b) Review your risk allocation on your pension plan and start lowering the risk level.

c) Consolidate your bank accounts if you have not already done so.

d) Start streamlining your investment account(s).

e) Begin now to scout various areas outside Bermuda if you plan to retire abroad.

f) Your mortgage and other liabilities should be paid off with no further intention of borrowing.

g) Additional savings as a result of paying off mortgage or other liabilities should be used as voluntary contributions to your pension plan.

h) Consider and make any changes to your insurance policies.

i) Review your current cash flow and determine changes you will make at retirement.

6 months to retirement

a) Review the next course of action with your retirement planner.

b) Request information on the various pension options that your company will make available at retirement. 

c) Obtain information on individual health insurance from local providers.

d) Request a copy of your Bermuda Social Insurance monthly benefits plan.

e) Adjust any immediate insurance needs.

f) Finalize annual or monthly retirement cash flow options; work with a retirement planner regarding realistic monthly requirement expenses.

g) Review investment allocations for positive cash flow options.

h) If retiring abroad, acquire new homestead and sell existing homestead to fund purchase.

i) Enquire about long term care especially regarding the cost of treatment locally or abroad.

j) Advise employer of retirement date.

At this point you will wish to meet with your retirement planner about 2-3 months before retirement to confirm that you are on track for your retirement due date.

If you are given the green light, then your retirement countdown begins.  Use this time to plan a trip to celebrate the start of a relaxing and fruitful retirement.

Carla Seely is a Senior Wealth Manager at AFL Investments.  She may be reached at 294-5712 or [email protected]