How to Live Your Pre-Retirement Life in Preparation for Retirement

How to Live Your Pre-Retirement Life in Preparation for Retirement

You’re thinking about retirement. Maybe you have 5-10 years left to prepare for this exciting change. It’s time to consider what you need to do to ensure you have sufficient money for the retirement lifestyle you want.

Let’s assume you and your partner have talked about your retirement expectations and know how much you will need, how much you have, and a plan for reaching those financial goals. Then you can take these final years before retirement to prepare and ensure that you are able to enjoy retirement.

Let’s get into some of the issues you and your partner should be thinking about as you approach your post-work years.

The Softer Side of Preparing

This article focuses on being financially prepared. But you should also think about what you are going to do with your time.

Years of working toward the goal of retirement may leave you looking forward to not having demands on your time.

However, as life expectancies have increased, you may have 30 or more years. That is a long time to have at your leisure. If you have spent 40 years with a career that helped to frame your identity, you may want to think about what you’re going to do to find fulfillment.

If you have your plan and have selected your retirement date, you might start to feel like you are in limbo. Or it may be a grueling exercise, just counting down the years, months, and days until freedom.

There are some practical steps you can take in the meantime to ensure that you are financially prepared to enjoy the retirement you’ve been working toward for so long.

The Dark Side of Preparing for Retirement

Avoiding estate planning is a common habit. No one wants to confront their own mortality and prepare a will and testament.

However, as Hank Coleman recommends in his article “Top 5 Reasons Why You Need a Last Will and Testament,” on the website, there are many reasons to prepare your will in advance.

This includes taking control of what you want to happen after you pass, instead of leaving it up to the courts to decide.

Pay Off Debt

While you are still earning a full salary, pay off your debts.

When you retire, in most cases, your income will be lower. Any regular debts such as your mortgage, car loans, credit cards, or other loans will take up a larger percentage of your income than they do now.

So if you can, eliminate these expenses before you retire. Then you have more freedom to make your money work for you, including deciding which income sources will pay for your retirement lifestyle.

Convert Assets to Savings

You may also want to consider transferring assets into savings. For example, do you have retirement assets which are potentially exposed to market risk? It may be worthwhile to consider ways to preserve your money so you can rely upon it for retirement income.

Other asset-related decisions may concern simplifying your lifestyle or cutting expenses. For example, you could downsize your home.

While many people would prefer to stay in their family home for as long as possible, there are financial benefits to downsizing to a smaller home that costs less to run and insure.

You may be able to downsize and not have to take a mortgage. Not only that, you can transfer any additional funds into your retirement savings or different financial vehicles to increase your retirement nest egg.

This may also be the time to liquidate any assets that you aren’t using or enjoying. By all means, keep the RV if you and your spouse are planning your great American retirement road trip.

Keep the condo in Florida if you are planning to either move there full-time or make good use of it. However, if you have property that isn’t working for you, you may consider selling it to pad your retirement savings or convert it into more income.

Create a Social Security Strategy

You and your spouse or partner will be eligible for Social Security. But you don’t have to start to draw immediately.

You can strategize the most effective times to start your draw to maximize your income. First, the longer you delay your draw, the more monthly income you will be able to draw.

Also, consider when you and your spouse intend to retire. Will it be at the same time or will one of you retire before the other?

Based on whether you retire at the same time, or one before the other, you may be able to manage your draw for even longer while you still have a household income.

Find the Right Time to Convert Your Portfolio

One mistake that many people approaching retirement make is to convert their 401(k), IRA, and other accounts too late. Yes, it’s good to make the best possible choices for your retirement money. But if you convert too late, you may be taking on unnecessary or excessive exposure to market volatility risk.

Of course, everyone’s appetite for risk is different. But then retirement is the point when you are drawing on your nest egg for income. You are no longer relying upon your career to earn income and cover your monthly living expenses.

So, it’s important to have frank conversations with your financial professional about your goals, expectations, and concerns.

If you haven’t started planning for your retirement income, or a shift to a more conservative retirement wealth strategy may be in order, the financial professionals listed on stand ready to help you.

Test-Drive Your Budget

Your pre-retirement years are also an opportunity to test if you can live on your projected budget. If you know that your income is going to reduce when you retire, as it does for most people, this is your chance to practice.

Start practicing paring down your living expenses to see if the income you are expecting in retirement will be sufficient for your plans. This practice not only gives you a chance to see if your expectations are realistic. It also lets you put even more of your income into your savings while you are trying to live on less.

Whatever you choose to do during your pre-retirement years, making plans and saving are critical steps. While others may procrastinate about their retirement, you are researching ways to prepare to make the most of the fruits of your life’s work.

While you are preparing financially, make sure to have honest conversations with your partner about your retirement goals. Also, discuss your plans with your family to make sure that your expectations are aligned or that compromises are set.

Ready to Prepare for Your Retirement Future?

If you have questions about planning for retirement, and how to either make the most of your remaining years in the workforce or how to prepare for an early retirement, contact a financial professional at

They can help you develop a powerful income management strategy to make the most of what you’ll do in retirement. Please visit our Locate a Licensed Advisor or call us at 877.476.9723 for a personal referral to get started.

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