Top 10 Things To Do Before You Retire
Retirement is a major life milestone, but before you can fully enjoy those golden years, there’s a lot to consider and prepare for. While many envision a stress-free time filled with leisure and adventure, achieving that ideal retirement requires careful planning and foresight. To help you get started, we've compiled the top 10 essential things you need to do before you retire.
From creating a solid financial plan to understanding your healthcare needs, these tips will ensure that you’re not only financially prepared but also mentally and physically ready to embrace this new chapter of your life. With expert advice, valuable tools, and proven strategies, this guide will help you avoid common pitfalls and make your retirement dreams a reality. Ready to take charge of your future? Let’s dive in!
1. Create a Retirement Budget
Your spending habits will change in retirement. Build a detailed budget that accounts for travel, healthcare, hobbies, and emergencies. Use our Retirementize calculator to model how much you’ll need each year.
2. Understand Your Retirement Income Sources
Know exactly where your income will come from—pensions, RRSPs, CPP/OAS, investments, annuities, or part-time work. Calculate your projected income and identify any gaps. You can simulate this with our retirement income vs. savings calculator.
3. Eliminate Debt
Carrying debt into retirement can weigh heavily on your finances. Pay off high-interest debt first—like credit cards and personal loans—and plan to be mortgage-free if possible.
4. Maximize Your Government Benefits
Make informed decisions about when to take CPP and OAS. For example, delaying CPP can increase your monthly payments significantly. Explore both early and late options.
5. Review Your Health Insurance and Medical Coverage
Understand what medical costs will be covered and what won’t. Look into supplemental insurance, long-term care coverage, and budget for future medical needs.
6. Downsize or Optimize Your Living Situation
Is your home too big? Consider downsizing, relocating, or making modifications for aging in place. Check out our post on home modifications to support a safe, independent lifestyle.
7. Plan for Taxes in Retirement
Withdrawals from RRSPs and other registered accounts are taxable. Use strategies like income splitting, TFSA withdrawals, and planning RRSP meltdown strategies to manage tax hits. Our RRSP meltdown article explains more.
8. Get Your Legal Documents in Order
Ensure you have a valid will, power of attorney, and healthcare directive. These protect your wishes and prevent family stress during medical or legal emergencies.
9. Find Purpose and Plan How You'll Spend Your Time
Retirement can feel empty without structure. Will you volunteer, travel, work part-time, or start a new hobby? Discover ways to stay active with our 101 best ways to spend retirement.
10. Test Drive Your Retirement
Try living on your projected retirement budget for a few months before retiring. This helps identify blind spots and make adjustments while you're still earning.
Fun Facts
- Studies show that 40% of retirees in the U.S. are either working part-time or plan to start a second career during retirement. It's not just about stopping work—it's about finding new passions!
- According to a recent survey, the average retirement age in North America has increased from 62 to 65 years old over the past decade, as more people are staying in the workforce longer.
- Did you know that travel is the number one activity most retirees look forward to? In fact, 72% of retirees say they plan to travel more once they retire, with 40% wanting to explore international destinations.
- Many retirees experience improved mental and physical health once they stop working. Studies suggest that retirement can lower stress levels and offer more time to focus on wellness activities like exercise and healthy eating.
- A surprising 35% of retirees turn their hobbies—like crafting, gardening, or photography—into income-generating side gigs. Whether it’s selling homemade goods or offering freelance services, hobbies can help supplement retirement income.
Conclusion
Retirement is not just an end—it’s a brand-new beginning. By tackling these 10 things before you retire, you set yourself up for joy, freedom, and peace of mind. Whether it’s understanding the phases of retirement, optimizing your income strategy, or avoiding common mistakes, you’ve got this! Let Retirementize help you build a plan that works with the lifestyle you’ve been dreaming about.