Start with your current financial situation, specifically pay attention to how you can start to maximize your income and begin to reduce your expenses. For a lot of people, planning for retirement normally starts about five years ahead of schedule.
Below is a helpful guide on areas that you should focus on. [It is important to note that this is to give you an idea only and should not be the only checklist used].
Five Years to Retirement Date
- a] Meet with your pension provider and make sure to discuss the following:
- a. Review you current pension plan account holdings.
- b. Consolidate any other pension plans into one account.
- c. Discuss the current rules and regulations regarding accessing your pension at retirement.
- d. Determine the benefits of making additional voluntary contributions if needed.
- b] Review your bank account[s], if you have multiples do you really need them all?
- c] Review your investment account[s]; review the asset allocations and make sure the investment allocations match your time horizon.
- d] Review your insurance policies [i.e. life, home, car], do they reflect current values?
- e] Update your will or visit a lawyer and have a will created and filed.
- f] Update your beneficiaries on anything that has a listed beneficiary i.e. life insurance, pensions etc.
- g] If you still owe anything; mortgage, car loan, credit cards – time to pay those off.
- h] Look at your cash flow. Can you decrease your expenses and increase your savings?
- i] Determine where your retirement income is going to come from?
- a. Pension
- b. Rental collection
- c. Social insurance
- d. Investments
Two Years to Retirement Date
- a] Review your risk allocation on your pension plan and start lowering the risk level.
- b] Crunch numbers for retirement income vs. retirement expenses to ensure positive cash flow.
- c] Consolidate your bank accounts to make sure you are streamlined.
- d] Start consolidating your investment accounts to ensure a clear investment strategy.
- e] If retiring overseas; make plans for your first initial trip to look at potential retirement locations.
- f] All debt should be paid off with no further intention of borrowing.
- g] Renovations to your house should be completed.
- h] Review your current cash flow and determine changes you will make at retirement.
- i] Determine options for long term care needs.
6 Months to Retirement
- a] Request information on the various pension options upon retirement.
- b] Obtain information on individual health insurance from local providers.
- c] Request a copy of your Bermuda Social Insurance monthly benefits plan.
- d] Adjust any immediate insurance needs.
- e] Finalize annual or monthly retirement cash flow options.
- f] Finalise retirement budget for expenses.
- g] Review investment allocations for positive cash flow options.
- h] If retiring abroad make decisions on accommodations – renting vs. ownership.
- i] Enquire about long term care especially regarding the cost of treatment locally or abroad.
Retirement Day
- a] Create your retirement folder with all your financial and insurance information.
- b] Ensure you have a clear understanding of your retirement budget.
- c] Plan for your retirement trip.
- d] Have a retirement dinner with your family and friends to celebrate the next chapter.
- e] If moving abroad, start packing.
– Carla Seely is the Vice President of Pension, Life and Investments at Freisenbruch-Meyer, if you would like any further details please contact cseely@fmgroup.bm or call 441 297 8686