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Retirement Planning Checklist

Writer's picture: Dan De La TorreDan De La Torre

Updated: Feb 5

Getting ready for retirement might feel overwhelming, but we've simplified it into easy-to-follow steps. 


Save as much as you can into your retirement accounts. 

Maximize your contributions to retirement accounts by saving 12% to 15% of your salary annually for retirement, including your employer's contributions if you have a work-based retirement plan. 


Individual Retirement Accounts (IRAs) offer tax advantages, either now or upon withdrawal. If you're not in an employer-sponsored retirement plan, you can fully deduct your traditional IRA contribution on your tax return. However, if you have an employer plan, whether your contribution is deductible depends on your income.

 

If you have a 401(k) through your employer, consider also opening a Roth IRA, which provides tax-free growth and tax-free withdrawals in retirement. This can be a smart way to plan a tax-efficient retirement income strategy. 


For both traditional and Roth IRAs, the 2024 contribution limits are $7,000 for those under 50, and $8,000 for those over 50. In 2025, these limits are expected to remain the same.  

Similarly, for both traditional and Roth 401(k)s, the 2024 contribution limits are $23,000 for those under 50 and $30,500 for those over 50. This includes a catch-up contribution of $7,500. In 2025, the limits rise to $23,500 for under 50s, and $31,000 for those over 50, which maintains the $7,500 catch-up contribution. Additionally, individuals aged 60 to 63 are eligible for a higher catch-up contribution of $11,250, allowing for a total contribution of up to $34,750. 

 

Simplify your portfolio 

As retirement nears, maintaining a concise and precise overview of your entire investment portfolio is crucial. Managing information can become challenging if your investments are dispersed across multiple firms.  

 

Create a budget for your expenses in retirement  

In retirement, your expenses will shift. While you might spend less on work-related costs like payroll taxes or attire, you could spend more on hobbies, travel, or healthcare. Take time to evaluate your priorities and consider how medical coverage, especially if currently through your employer, will impact your budget. 

 

Plan to pay off your debt  

In an ideal scenario, you would enter retirement without any debt, but realistically, that's not always achievable. Therefore, it might be okay to retire while still having outstanding debts, such as a mortgage, car loans, or credit card balances. It's important, to be aware of the consequences of retiring with debt and to have a strategy in place to pay it off. 

 

Consider purchasing an annuity  

If your regular expenses surpass your monthly income, or if there's worry about your retirement savings lasting throughout your retirement years, consider converting a portion of your savings into an annuity. An annuity, essentially an insurance contract, offers periodic payments in return for an initial investment. By allocating some of your retirement funds to an annuity, you secure regular payments for either the duration of your life or a set number of years. Additionally, deferred variable annuities, which start payouts at a later age, can provide tax advantages for those saving for retirement. 

 

Plan to withdraw from your retirement accounts  

Key factors to consider include ensuring your savings last throughout retirement, making withdrawals in a tax-efficient manner, and understanding the need for required minimum distributions (RMDs) from your IRA or 401(k). 


Starting at age 59½, you can access funds from your IRA and 401(k) without facing the 10% federal early withdrawal penalty. Legally, you're required to begin taking taxable RMDs from these accounts by April 1 following the year you reach the designated RMD age. Failing to do so could result in a penalty of up to 25% of the amount that should have been withdrawn, though this may be reduced to 10% if corrected promptly.  


Due to changes to federal law that took effect on January 1, 2023, the age at which you must begin taking RMDs differs depending on when you were born. 


The RMD age is 73 for those born between 1951 and 1959 and 75 for individuals born in 1960 or later. Calculating these RMDs can be complex, but assistance is available. 

 

When should you retire? 

Choosing a realistic retirement age isn't necessarily an easy task, but we can offer some practical tips. 

 

File for your Social Security retirement benefits  

The age at which you start collecting Social Security will determine how much you'll collect. You can start receiving reduced benefits as early as age 62. However, you'll attain your Social Security Full Retirement Age (FRA) between 66 and 67, depending on your birth year. This is the age when you're eligible for your complete Social Security retirement benefits. Delaying your claim past your FRA can increase the value of your benefits with each month you wait, up to age 70. 

 

Don't hesitate to seek professional guidance.  

Crafting a successful retirement strategy involves complex decision-making, informed by thorough research and ongoing updates in response to shifts in your personal situation, investment landscape, and regulatory environment. FedAdvantage offers individual consulting services that can create a strategy for maximizing your retirement income and ensure you are taking the appropriate steps to achieve your goals. 

 



Old couple riding bikes together through a park in the fall.

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