If you are among the folks who are planning to retire either in springtime or early summer, be warned that before you begin planning your retirement party, there are critical things you’ll need to do first.
Make sure to get the match. Your employer may “match” and/or offer “profit-sharing” contributions to your 401(k) or another retirement plan. You typically must be actively employed on the date of payment in order to receive these funds, so be sure that you understand the terms before setting your final work date.
You may want to up your personal contribution percentage to help you reach your annual maximum. Employers frequently limit the amount you can contribute to your plan from each paycheck, so you may need to increase your contribution percentage long before you retire to max out.
Review Your Risk Profile. Retirement is a major change in your life. It’s a transition from saver to the spender, where you’ll start spending your retirement nest egg. Rebalancing your investments is critical to keep things in balance when you retire.
Don’t keep too much of your portfolio in riskier assets like stocks, or you’ll be vulnerable to a potential market downturn.
Don’t Underpay Your Taxes. When you retire, by default, taxes aren’t withheld on your retirement income. You have to opt in to have taxes withheld from your Social Security benefits, pension benefits, and IRA or 401(k) distributions.
If you don’t have taxes withheld, you’ll need to pay estimated taxes.
Reference: Kiplinger (May 2017) “4 Actions to Take If You’re Retiring in 2017”