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4 Things To Do Immediately When You Retire

Updated: Aug 1, 2023

Reduce your risk: The biggest thing that you should do when you retire is reduce your risk in your investments. You have just given up your income because you believe you have enough to last for the rest of your days. What do you think happened to the people who made that decision and retired right before the stock market crash of 2008, or 2001, or 1987 or….you get the point. Many of them had to turn around and go back to work at less desirable jobs. Many of them had to reduce the vacations and entertainment they had planned. Don’t let the stock market decide when and how you can retire. Just make safer decisions.

Roll your 401k into an IRA: Dave Ramsey says the first thing you should do when you retire is roll over your 401k. We all want to listen to Dave Ramsey right? Think of it this way. You give your resignation, have your retirement party and then start packing up your office. You grab your awards, family photos, maybe you even throw in the company stapler when no one is looking. I’m not judging, you know who you are. What did you forget? You forgot the money that you’ve been saving for decades! Are you really going to ride off in the sunset and just hope that some benefits manager who you’ve never met, you only knows you as former employee #3842 is going to take care of your money? Roll it out into a IRA that can give you more control, more options, less risk and oftentimes less fees. This can typically be done in 10 minutes and is completely tax free and painless. If you don’t do it you’ll remember this article in 6 months when it takes you 45 minutes to verify yourself and get information on your account.

Decide when to turn on your income streams: It’s so important that you decide when you are drawing income and from which account. Sit down with your financial advisor and CPA and decide which accounts should produce income now and which accounts should sit and grow. If you’re like most people you have non-qualified accounts, IRA’s and maybe some Roth IRA’s as well. You may have stocks that produce dividends, annuities, CD’s etc. It gets to be akin to a jugsaw puzzle when you understand that each of these accounts are taxed differently when you start taking money out and each account has strengths and weeknesses. Take a minute to put together a good plan that can give you added peace of mind as you enter this new phase of your life.

Protect yourself from health care costs: Do you know anyone who had to receive long term care? Do you know any who has complained about their hospital bills or prescription copays. Healthcare cost are a serious issue when you retire. Think about this: If a husband and wife are age 65 or greater there is a 50% chance that one of them will need long term health care. With these costs north of $7,000/month in some areas it can really take a bite out of your retirement nest egg. Make sure you’ve planned for this by getting a long term care policy. These insurance plans have changed a lot over the years. Nowadays it’s not just: Pay the insurance company tens of thousands of dollars and if you don’t need long term care they keep all the money without so much as a thank you. You actually have options that attach the LTC coverage to annuity or life insurance. Many of these products give you the protection you need while knowing that either you or your loved ones will be able to access the money if you don’t need the care.

Planning Retirement

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