8 Final Money Moves To Make This Year If You’re Retiring in 2025

If you’re planning to retire next year, chances are you’re likely counting down the days until it’s time to start the next chapter. Now is the best time to make sure you have all of your financial ducks in a row, especially if there are plans that may require making changes in retirement .

GOBankingRates spoke to Richard Craft, CEO of Wealth Advisory Group, a World Insurance company and Eric Elkins, founder and CEO of Double E Financial Solutions for their advice on what soon-to-be retirees should prioritize now. Here are the eight money moves they recommend making if you’re retiring next year .

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Confirm Your Social Security Benefits

Craft said retirees can easily check this item off their to-do list by logging into their account at SSA.gov. Those retiring in 2025 that have not set up an online account should make it a priority now.

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Start Estimating Your Expenses in Retirement

The simplest way retirees can do this, according to Elkins, is by determining their annual expenses now and what they are forecasted to be while in retirement.

Take a moment to review your bank, loans and credit card statements for the last 12 months. Write down the cost of each expense. This includes mortgage, insurance, taxes, utilities, groceries, gas and vacations. Then, Elkins recommends building a spreadsheet that outlines what you spent in the different categories each month.

As you get familiar with the cost of your annual expenses now, Elkins said to assume these expenses will have inflation during retirement. Plan accordingly now to pay a little more.

“We inflate our clients’ expenses by 3% per year for the remaining years of your retirement,” he said. “This will enable you to see what after tax income you will need per year while in retirement.”

Organize All Debt

If you’re currently in debt, Craft said to organize this information. Make sure you clearly understand the outstanding balance owed on your debt and its interest rate along with principal and interest payments.

Identity All Income Sources

Where will your income come from during retirement? Craft said soon-to-be retirees should use this time to identify current and future income sources. Outside of Social Security, this includes pension benefits, any part-time employment and required minimum distributions (RMDs) from your retirement accounts.

Understand Your Asset Allocation

How much money do you have in stocks, bonds and cash? Craft said it’s critical for anyone retiring in 2025 to understand their overall asset allocation for all of their accounts.

As you review this information, ask yourself if it’s an appropriate allocation for your risk tolerance. If you don’t know, Craft recommended completing a risk tolerance worksheet to determine what it should be.

Ask Yourself: Which Income Bucket Is Best To Withdraw Money From?

Elkins recommended asking yourself now which bucket you plan to withdraw from to get your income.

For those unfamiliar with the bucket retirement strategy, this is a term which helps investors to visualize the process of generating income in retirement. You may refer to a two-bucket or three-bucket model.

The first bucket (or immediate bucket) contains liquid funds to cover expenses during the first year or two years of retirement. After the first two years of retirement, the second bucket (or intermediate bucket) is used for up to 10 years in retirement. This bucket’s goal is to grow enough to cover expenses during this time frame. And the third bucket (or the long-term bucket) is meant to outpace inflation and grow as much as possible. When splitting your retirement portfolio across the three buckets, the third bucket typically has funds like stocks and other high growth investments in it.

“Too many retirees and advisors take for granted which income bucket is going to be most efficient when withdrawing money,” Elkins said. “You could lose a lot of money over time if you withdraw from the wrong bucket.”

Make Health Insurance Plans

There’s a lot to consider regarding your health insurance, including medical, prescription, dental and vision needs, in retirement. At a minimum, Craft recommended asking these questions as you begin to strategically plan for healthcare.

• Are you able to elect Medicare Part A and purchase supplements (Parts B and D)?
• If you are under age 65 or your partner is, where will you purchase health insurance? A few suggestions from Craft include on the Exchange or under COBRA from your employer.

Review and Update Estate Planning Documents

These include wills and Powers of Attorney. If it’s available, Craft said soon-to-be retirees may use a group legal plan from their employer. Doing so means paying a small monthly fee, but it helps provide accurate templates and allows retirees to receive online help from an attorney.

This article originally appeared on GOBankingRates.com : 8 Final Money Moves To Make This Year If You’re Retiring in 2025