ER checklist

[nun]

Here's the deal, I'm 48 and in 4 years time the mortgage will be paid off and I'll be able to ER comfortably. I'm starting to think what life will be like without the warm fuzzy blanked of employment....ie none of those benefit things. I'm set as far as health insurance goes as I live in MA and the state has worked with insurers to provide some reasonable plans. But what other things should I be doing to get ready for the big day. What's your checklist to prepare. here are a few I have

1) Join AARP at 50
2) Buy health insurance
3) consolidate finances, set up CD ladder
............

 

[REWahoo]

Skip #1 and go straight to #2. I've never found the benefits of belonging to AARP worth the cost. I'm not renewing my membership when it expires in a couple of weeks. Nothing to do with their politics, purely a financial decision.

 

[REWahoo]

One more thing...

You might find this thread useful: http://www.early-retirement.org/forums/f29/how-do-did-you-prepare-for-er-20952.html

 

[W2R]

I do not belong to AARP.

Your asset allocation and portfolio are probably going to be different as a retiree, than they are now in the accumulation phase. You will probably want to be gradually moving to a more conservative portfolio, and so on. If you have your retirement portfolio in place a year or so before you retire, then you can have a "dry run", and see the actual yield without having to withdraw from it.

Also, you can mentally set aside a larger-than-usual emergency fund, in case the unexpected happens (such as a pension taking a few months to get in place, or another market dive).

See a lawyer to draw up a will and make an estate plan.

Make a list of things you want to do when you retire.

Take care of (or set aside money for) those big expenses that you know are coming up very soon, such as a new roof or new car. That way you can hopefully live on a little less during those crucial first years of ER.

Keep track of every cent you spend for these four years, so that you know you have a realistic budget in mind.

If you are getting retirement benefits from your work, make a list of questions you may have about them and find the answers.

I am sure there are many more things for your checklist, but these are what came to mind.

 

[ksr]

If you have any home improvements you want to make, consider doing it before you retire. It doesn't make much difference financially, but you may feel more comfortable spending a large chunk of cash while you still have income (I regret not doing a bit more of this before I left megacorp).

 

[mickeyd]

Pay off mortgage prior to ER.

 

[heyduke]

If you have any home improvements you want to make, consider doing it before you retire. It doesn't make much difference financially, but you may feel more comfortable spending a large chunk of cash while you still have income (I regret not doing a bit more of this before I left megacorp).

... likewise plan any major medical "repairs" now while you have better coverage... my wife will get her eyes done before we ER

 

[walkinwood]

Study all the retirement investing & withdrawal strategy white papers/books available out there - Bengen, Guyton, Bernicke, Bob Clyatt, Otar, Bodie, Milevsky and others. I think a sound knowledge of the underpinnings of your plan is essential to your being able to follow it when times are rough. Choose your investment and withdrawal strategy only after you've studied them all.

Put your numbers through as many calculators as you know off. Then ask why they are different and be comfortable with your understanding of the differences and how they may apply to you.

I assume you are already tracking your expenses and portfolio. Keep doing that since it is the basis of your projections.

Live your ER budget before you ER. I can't tell you how good it felt to KNOW, before we ER'd, that our budget was realistic & well padded.

The link that REWahoo posted is terrific!

 

[megacorp-firee]

Here's the deal, I'm 48 and in 4 years time the mortgage will be paid off and I'll be able to ER comfortably. I'm starting to think what life will be like without the warm fuzzy blanked of employment....ie none of those benefit things. I'm set as far as health insurance goes as I live in MA and the state has worked with insurers to provide some reasonable plans. But what other things should I be doing to get ready for the big day. What's your checklist to prepare. here are a few I have

1) Join AARP at 50
2) Buy health insurance
3) consolidate finances, set up CD ladder
............

consider
1) figure out retirement budget requirements
2) compare to expected income/withdrawal
...if they 'compute' ...
then do your # 2 and 3.
Feel free to do your #1 if you feel like it. I think it's a waste of 12 bucks. I let my 'free' membership (from Walgreens last year) lapse, since I found no benefit. It seems that. IMHO, at best, they are touts for insurance companies and push some of their own political agendas without properly representing their membership.

another thought. if you can, make sure that you properly assess your and your partners risk tolerence level. I found that my DW was lower than we thought and that does cause some uncomfortable discussions.

also over-engineer (i.e. have a lot of 'fluff' in your) retirement portfolio
... it makes tough times a bit easier to handle.\

best of luck to you

 

[moreorless]

Many forum members have suggested to drop AARP, I don't know if you have looked at other auto insurance costs outside of aarp and I also don't know if your young age makes a difference with insurers.

I do know that my wife and I saved well over $300/yr to go with AARP recommended Auto Insurer (including a substantial insurance coverage increase) Had we kept coverage the same as with our previous auto insurer, the savings would have been even more!

AARP is good for some issues and not so good for others! Like everything in todays society, compare everything to your advantage and then use it if it benefits you! If you can spend $20-30 & then save $200-300 why not??

The big kicker as I see it is being sure you know where you are at all times on health care insurance costs! This is a time of change, for everything! Never presume you have health care costs under control! Outside issues control your costs, not you!

Early retirement can be great but these times can be a bit trying as far as CD Laddering goes. It is important to focus on available COH and next CD date etc.

Our own personal thoughts are to maintain a "Capital Status Quo" in other words we maintain our capital base and use earned interest against that capital base as living income...pretty simple & nothing new! Everyone has been doing it for a long time! Just hard to accomplish!!

Obviously the goal is to generate enough income in interest and yet be able to draw down on the capital to last your lifetime or leave enough for beneficiaries if that is a consideration.

Having the Mortgage paid off is great but there are other cost issues to take into effect that can certainly affect your retirement abilities. Be sure you have addressed them all....'nough said!