Estate Planning

20 Things to Do Before You Retire in the 2020s

By Barber Financial Group

December 30, 2019

20 Things to Do Before You Retire in the 2020s

Well, here we are approaching the close of another decade. As many often do near the end of a milestone, we’re doing a countdown. However, this countdown isn’t looking back over the past decade, but rather forward toward the decade on the horizon. New decades often mean new goals, and for many, it’s likely the ultimate goal during our working years, retirement. 

With that, we thought it would be neat to launch our retirement-ready readers into the new year with a newfound sense of purpose and vigor. Here is a list of 20 things you need to do before you retire in the 2020s. If you plan to retire in the 2020s, fear not! This list will get you started and on the path toward a successful retirement in the new decade. Let’s jump in. 

20. Look Forward to the Longest Vacation You’ll Ever Take

Our fearless leader Dean Barber often says, “People will plan longer for a summer vacation than they will the longest vacation of their lives, their retirement.” 

Think about that for a second. The longest vacation you’ll ever take is retirement. It’s a great comparison. I used to think my longest vacations were behind me since I no longer get to enjoy a three-month summer vacation each year between school years. It’s nice to know that down the road, retirement could fill that gap. 

If you put retirement in the framework of a vacation, planning for it might be slightly less daunting of a task. I spent nearly a year planning a two-week vacation to Europe last year, and while I’m not anywhere near retirement, I know for a fact it’s going to take a lot more time to plan. 

Let’s put that to scale. Let’s say I took 10 months (40 weeks) planning a two-week vacation, and I want to prepare for a 30-year retirement. Using that same 20:1 metric, I should be planning my retirement for 600 years. That’s unrealistic, but it illustrates the point that we often overlook how much time we should be putting into planning for our retirement. 

On the bright side, the more you look forward to retirement, the more you’re thinking about it. And thinking about retirement is a great place to start. The most significant difference between a retirement and vacation is that you don’t have to plan out every single day of your life in retirement – but that doesn’t mean a plan isn’t necessary. Learn more about our Retirement Planning services. Onto the next thing to do before you retire in the 2020s.

19. Develop a Vision of Your Perfect Retirement

What do you want to do? Are there things you want to learn? Places you want to go? Knowing what you want to do in retirement seems easy, but when you try and put it all together and plan for all of those expenses, it can get pretty hairy pretty quickly. However, placing the bullet point or bucket list items altogether in a list even can be a tremendous start. 

Other things to consider are large purchases or donations, such as paying for a grandchild’s college, when you’re going to need new cars, or purchasing a vacation home. Maybe you want to learn woodworking or start a scholarship at your alma mater – whatever you know you want to achieve in retirement, write it down. Knowing your goals and writing them down can help you focus on developing a successful retirement. 

Another reason for writing down all of your goals for retirement is it can be an extremely helpful tool when you are discussing retirement with your financial planner or advisor. Financial planners aren’t mind readers. They can’t magically know that when you turn 70, you want to take an around-the-world cruise to celebrate or that you want to buy your 16-year-old grandson his first car. However, if you have those goals ready to share with your financial planner before you retire, they can help you make those goals a reality.

While we’re on the subject of financial planners and financial advisors, our next thing to do before you retire in the 2020s is…

18. Find a Partner You Can Trust

As with most service relationships, there is trust to be gained and bonds to be built. Doctors, lawyers, and even the kid down the road who mows your lawn are trusted to do their jobs in the best interest of their patient or client. These relationships are what the service industry is built upon. Trust is of the utmost importance in your health, personal, and financial wellbeing. 

The financial industry is a mess of actual financial planners and product salesman masquerading as financial advisors. For your average consumer, it can be hard to tell who is who. An excellent place to start is by looking for an AIF® or Accredited Investment Fiduciary®.  

At Barber Financial Group, our financial planners are Accredited Investment Fiduciaries®. Your needs take precedence over our financial planners. They are required to put your interests ahead of their own. Our financial planners work directly with our team of in-house CPAs, estate attorneys, Medicare experts, insurance specialists, and a top-tier customer service team to address all of your retirement needs. 

Our holistic approach is a full-service retirement planning system called The Guided Retirement System. It’s designed to help guide you to and through a successful retirement. Finding a partner you can trust is not a task to take lightly. Fill out the form at the very bottom, or give us a call at 913-393-1000 if you’d like to talk with no-obligation. We will let you know if we can add value to your retirement plan or if you’ve got a solid plan already.

Many of you might have a CPA of your own, and that’s great, but it brings us to our next thing to do before you retire in the 2020s…

17. Start Planning Your Taxes for Retirement Now

A common misconception about taxes is that you’ll stay in the same tax bracket or even go to a lower tax bracket, but that’s often not true. Taxes in retirement are more complicated than while you’re in your earning years. Your retirement income is often located in different types of accounts, all of which have different tax implications. This isn’t necessarily a bad thing, but you need to understand how to utilize these accounts in a tax-efficient manner. 

Tax diversification and asset location are only part of the puzzle. Understanding how Social Security can affect your taxes is also an essential factor. You might say, “But Social Security is tax-free, right?!” Not always. There are considerations to analyze like required minimum distributions (RMDs), which we will discuss a bit later as well. 

Forward-looking tax planning is a strategy of saving money on taxes over the years rather than looking at each year in a vacuum. If you plan your strategy over the years instead of one year at a time, you’ll see net savings on your tax bill over those years. It might be a bit late for these strategies in 2019, but JoAnn Huber, Partner and CPA at Barber Financial Group, wrote 2019 Year-End Tax Planning for Retirees. I suggest you read it to get a better understanding of the complexities of taxes in retirement. 

Learn More About Taxes in Retirement

If you want to learn more about how different types of accounts can affect your tax bill and other tax-related discussions, listen to episodes one and two of The Guided Retirement Show. In these episodes, Dean Barber and JoAnn Huber discuss traditional and Roth IRAs and 401(k)s. Tax planning is a topic we’ve covered at length, and we encourage you to visit our Tax Education Center for more. Our next thing to do before you retire in 2020 is also a subject we’ve thoroughly examined…  

16. Properly Claim Your Social Security

This is a crucial part of a properly constructed retirement plan. Yes, there are wrong and right ways to claim your Social Security. And according to a recent study, nearly 96% of American’s are claiming their Social Security at a sub-optimal time, collectively leaving $3.4 trillion on the table. That’s $111,000 per household of lost retirement income due to claiming at the wrong time. Crazy. 

There have been some changes to Social Security in 2020 that you might want to catch up on, but if you have any questions on the subject, you can always get our Social Security Decisions Guide to get you started. Or, like I previously mentioned, we’ve extensively covered Social Security on this blog, visit our Social Security Education Center for more.

Social Security guides us perfectly to our next thing to do before you retire in the 2020s…

15. Know Where Your Retirement Income Will Come From

It seems obvious enough, but when you get to retirement, it’s important to know which accounts to draw from and when. Like we discussed earlier, there are tax implications to taking money out of different types of accounts. However, you also need to be aware of how Social Security will impact your income and taxes after you begin claiming it as well. 

You also want to be aware of having your assets in the proper types of accounts depending on what stage you’re at in the retirement process or how your plan is structured. You could be a strong candidate for a Roth conversion, and you don’t even know it. It’s also important to understand where your retirement income needs to come from to plan for things like RMDs and qualified charitable distributions (QCDs). 

You can learn more about retirement income in our America’s Wealth Management Show episode Where is My Income Going to Come from in retirement?

This leads us to our next thing to do before you retire in the 2020s…

14. Plan Your Withdrawals

This topic is obviously connected to knowing where your income is going to come from in retirement, but planning your withdrawals is essential in retirement, especially when you hit RMD age. The age for RMDs actually just recently changed with the passing of the SECURE Act and takes effect on January 1, 2020. Now you don’t have to take RMDs until age 72, which seems like a win, right? Well, there are other details in the SECURE Act that make it not so pleasant from our perspective. Listen to our recent episode Presidential Elections & the SECURE Act for more information on the SECURE Act. 

Understanding when to withdrawal is just as important as knowing where to save. Which takes us to our next thing to do before you retire in the 2020s…

13. Understand Your Portfolio

Understanding why your investments are allocated the way they are is a highly important factor in a retirement plan. You need to know how your investments are allocated and how they are working for you in different market cycles. This allows you to understand your level of risk and your level of protection in a market downturn, bear market, or recession. 

If your financial planner doesn’t illustrate and explain how and why your investments are allocated, this should be a red flag. You need to know the reasoning behind your investments and how those allocations align with your retirement goals. If not, you might be opening yourself up to undue risk. 

Speaking of risk, let’s talk about our next thing to do before you retire in the 2020s…

12. Make Sure You’re Properly Covered

Risk management, or as it’s more commonly referred to, insurance. No one buys insurance hoping they have to use it. You don’t buy a new car, get updated insurance, and go immediately wreck the vehicle. However, insurance is a primary piece of any solid retirement plan. You need to know if you are adequately insured on the property and casualty side but also from a life insurance or long-term care perspective as well. There’s a point where you can be over-insured. Not only is it unnecessary, but it can also cause more damage than protection. Another consideration is for those who are retired and no longer on a company policy but are too young to enroll in Medicare. Knowing your options for coverage is vital. 

We offer a property and casualty insurance workshop and webinar called Are You Fully Covered? and another titled Insurance Coverage for Retirees, check our events calendar for upcoming dates. 

Our next thing to do before you retire in the 2020s is…

11. Understand Medicare & Plan for Rising Health Care Costs

You don’t have to be on Medicare to know it’s complicated and messy to understand. Even just comprehending what the Medicare Annual Open Enrollment period is can be a task. Luckily there are experts and resources like Medicare.gov to help you out. We have Medicare expert Tom Allen on our team to help guide people through the process of enrollment, coverage options, costs, and more. 

Even if you’re not ready to enroll, chances are if you’re nearing retirement age, you have parents or family members who are Medicare age. With how complex it is, it can be comforting to have someone on your side when you’re learning about Medicare. For that reason, Dean Barber sat down with Tom Allen for two episodes of The Guided Retirement Show, to talk about Medicare and break it down into simpler parts. Listen to the two parts here: Part 1 & Part 2. You can also find our report created by Tom Allen, Making Sense of Medicare for more information on Medicare.

Tom will be back for another episode in season two of The Guided Retirement Show, so look forward to those episodes coming very soon! 

Even with Medicare, the cost of health care in the US is continually rising. From prescription drug increases to higher-cost new procedures, health care costs are projected to rise by 5.5% year over year for the next decade. That’s according to the Centers for Medicare and Medicaid Services (CMS). It’s essential to plan for the rise in these costs. Especially as we age, we become more and more susceptible to the need for medical care. Planning as best you can for these costs can save you enormous headaches when you retire. 

And on the topic of age, our next thing to do before you retire in the 2020s…

10. Plan Your Legacy

Planning your legacy for your loved ones is more for them than yourself. While we often tell our clients to enjoy their wealth now with their family rather than leave it all to them later, it’s important to know that what is left when you depart goes where you want it to go. Having a proper estate plan not only means knowing your estate is transferred to the appropriate parties, but it also means a certain amount of peace-of-mind for your heirs. 

We aren’t talking financial peace-of-mind either, we’re talking about having the time to grieve and deal with their loss rather than being stuck in legal minutiae. Give your heirs the gift of being able to focus on what really matters when you’re gone, each other. Probate court is not a fun time and can be a long, arduous, and expensive experience that can be avoided with a proper estate plan. 

Understanding if you need a will or a trust is an important decision. Working with an estate planning attorney to discuss your options and put together a plan is also vital. Using online services like Legal Zoom can potentially lead to missed signatures or even inadequate plans. Our estate planning attorneys sat down with Dean Barber for a two episode series of The Guided Retirement Show, listen to those episodes here: Part 1 & Part 2. They discuss wills and probate as well as the pitfalls of going online for your estate plan.

Not only is it important to plan for your family, but it’s also important to plan with your family – this leads us to our next thing to do to retire in the 2020s…

9. Plan with Your Spouse

All too often are we told that one spouse or the other doesn’t want to deal with the finances, doesn’t understand them, or just plain doesn’t want to be involved at all. This is a serious problem when it comes to planning for your retirement if you’re married. After all, it’s your retirement together that you’re planning for, not just one or the other of you. You need to work on a plan for a dream retirement together, so you’re on the same page and know how you need your wealth to work for you. 

Another reason why it’s extremely vital that you plan with your spouse is that, barring a freak accident, one spouse is going to pass before another. Often, the husband passes before the wife. And knowing that 95% of women will be their family’s primary financial decision-maker at some point in their lives, it’s important that both spouses be involved because right now, only 10% of women feel financially secure. 

Planning together can help mitigate some of the fear of being alone with a financial mess after one spouse passes. If you both understand your plan and are working with a team you can trust, you can focus on your loss rather than your finances. And when you’re ready, you can know that you’re in hands that understand what your plans were together and can start to plan where you will go in the future. 

The idea that you plan together is important for so many reasons, but it’s also something to consider in our next thing to do before you retire in the 2020s…

8. Plan Your Living Situation

A common practice after retirement is to downsize the home or plan to do so in retirement. It’s a significant thing to plan for in the event you buy or rent a new home and incur new debt. What if you want to relocate to be with kids and grandkids? Plan for it! The better you plan, the more information you can provide to your financial planner, and they can build it into your retirement. 

Also, living situations can change multiple times in retirement. Like in the event mentioned previously, if you were to lose a spouse, maybe you’ll no longer need a full home to live in on your own. Or what if you or your spouse experience a life-changing medical event and need long-term care or live-in care? These are things you need to consider and have addressed in your retirement plan.

7. Pay Down Your Debt

Should I get out of debt before I retire? This is a very common question our financial planners get when they sit down with new people. Earlier this year, Jason Newcomer, Financial Planner and CFP® at Barber Financial Group, was at an event for the Financial Planning Association in Kansas City. The speaker, Greg Geisler, a CPA Ph.D. and professor of accounting at Indiana University, spoke about the most tax-efficient order to invest and pay down debts. This order needs to be adjusted based on each person’s individual goals and risk tolerance, but paying off high-interest debt was one of the highest priority items. In fact, paying off moderate interest rate debt was still ahead of making a contribution to a taxable brokerage account. Interestingly enough, paying off low-interest-rate debt was not on the list at all.

6. Save Diligently and Track Your Progress

Save, save, save. I take it if you’re reading this and have made it to item 6 on a 20-item countdown, you’re taking retirement pretty seriously. So, it might go without saying that saving is important, but I’m going to say it anyway. Saving is important. 

You should always take advantage of any company matches on your 401(k). Diversify your savings vehicles for tax purposes once you’re in retirement. Talk to a trusted financial planner to help you make decisions on traditional versus Roth 401(k)s and IRAs and take advantage of your best option. 

Another key component in saving is, well, not overspending. Make sure you aren’t paying for unnecessary things like insurance coverage you don’t need. Chart your expenses and create a budget while you’re working to understand your spending better. This will help you determine your budget in retirement. 

It’s critical to have goals – not only for retirement but for savings. Track your progress toward your goals, this can help motivate you toward your next goal. It’s also crucial that you protect your savings. Don’t go spending your retirement savings if you can help it since there are fees and tax implications to taking retirement money early. While you need to protect your savings from your own bad decisions, you also need to do our next thing to do before you retire in the 2020s…

5. Protect Yourself from Predators

Predators are everywhere, and they hunt in all sorts of malicious ways. A few years ago, my 82-year-old grandfather called me in the middle of the workday in a panic. 

He said, very worried, “Paul! Are you okay?!”

To which I replied, “Yeah, are you?”

“Well, I just got a call from someone claiming to be a police officer who had you in custody and needed five $500 gift cards from Lowe’s to bail you out.” He says, “Thought it was fishy…you’re obviously not there, so I guess it was a scam.”

So, I reply, “Um, yeah, that’s crazy Grandpa. You did the right thing calling me; always call any of us first if you get calls like that in the future. Glad everything is okay.” 

Gramps did two things right here; he questioned the whole scenario in his head and called me to verify his inclinations. Go gramps. This example was a very simple, unsophisticated approach to scamming. Sadly, it’s probably successful at times since they continue trying scams like this. Scams can get so much more involved, complex, and harder to spot. Learn more about scams targeting seniors by listening to Dean Barber and Brie Williams on The Guided Retirement Show. They discuss the Top 10 Financial Scams Targeting Seniors, listen here. According to Brie, over $3 billion is reported as lost to scammers, fraud, and financial abuse each year, but the actual number is likely much, much higher.

Cyber Security is HUGE

A more sophisticated approach to scamming compared to my grandfather’s caller comes online in the form of cyber scamming. From email phishing scams to hacking webcams to capture potential blackmail footage, cybersecurity has never been a bigger issue. To address this ever-growing problem, we host a Steps to Reduce Your Cyber Security Risks workshop and webinar presented by financial planner Wayne Robinson. You can find upcoming dates on our events calendar

Wayne will be joining Dean on The Guided Retirement Show in the upcoming season two, so be on the lookout for that episode soon. Make sure to subscribe on your favorite podcast app or on our YouTube channel, so you don’t miss it when the episode releases.

While cybersecurity is definitely a massive issue you will be hearing more from us on, we also want to address another internet-related thing to do before you retire in the 2020s…

4. Cut Through the NOISE

It’s been a topic of interest for us as of late to talk about how the news has been affecting the stock market. In the November 2019 Monthly Economic Update, Economic News, Where’s the Recession? Dean addresses how conflicting economic news is coming at us from multiple sources, but sometimes even the same source. So, what should we believe? 

It’s important to do research on your own and review multiple sources to give yourself a wider view outside of news media echo chambers. Recently, Shane Barber did a great job bringing together research from multiple sources to deliver a well-thought-out article on Presidential Elections and the Stock Market to see if there was a correlation between the two. Give it a read to find out, but the moral of the story is following market fundamentals based on what’s important to you, and your plan will outweigh most news-based market fluctuations. 

Emotions are high and only getting higher in 2020. Don’t capitulate based on your emotions, understand your plan, and talk to your financial planner. Make adjustments together that make sense to your overall goal and aren’t just knee-jerk reactions to market scenarios. 

While it’s key to cut through the noisy news media, it’s also imperative you do the next thing before you retire in the 2020s…

3. Pay Attention: Understand the Rules, Follow Changes, Stay Tuned-In

Yes, I just told you to cut through the noise. However, you still need to pay attention. Again, doing your own research is essential, as is finding resources you can trust. Like I mentioned earlier, the SECURE Act is a great example of why it’s important to stay tuned-in. Listen to our episode of America’s Wealth Management Show Presidential Elections & the SECURE Act to learn more about the SECURE Act. We will also be putting more information out about it in the coming weeks, so check back. 

Our team stays on top of trends in the market, government, and technology to make sure we don’t miss a beat when it comes to planning people’s retirement. As I’ve previously mentioned, we have our radio show America’s Wealth Management Show, our podcast The Guided Retirement Show, the Education Center, educational workshops and webinarsMonthly Economic Updates with Dean Barber on our YouTube channel, and much more. Our financial planners are also available to talk with you on the phone, in person, or via virtual meeting to address any questions you have with no-obligation. Just fill out the form at the bottom or give us a call at 913-393-1000. 

Educating yourself before retirement is paramount. However, it might not be enough to prepare you for our next thing to do before you retire in the 2020s…

2. Prepare for a Change in Lifestyle

Before you fully retire, it’s important to prepare yourself for a completely new journey. You may think you’ll easily fill your time with new or old hobbies, travel, family, and friends, but things might be very different when retirement finally arrives. Just make sure you understand the shift in lifestyles and give yourself the opportunity to adjust mentally. 

Retirement is what you’ve been working for your entire life, don’t let it slip away to boredom and loneliness. Find ways to keep yourself busy in retirement. We know it can be hard to find activities to do with peers in retirement, and that’s why we’ve created our BFG Travel Club and BFG Art Tasting Club. Juls Cook Tramposh hosts cruises and events like museum tours on a regular basis for our BFG Community. Each patron pays their own way, but it gives them an opportunity to share an experience with peers and make new friends. If you’re interested in learning about these events, email us at info@barberfinancialgroup.com with the subject line Add Me to the BFG Art Tasting & Travel Club Emails. We’d love for you to join the BFG Community. 

This brings us to our final thing to do before you retire in the 2020s…

1. Plan, Plan, PLAN

An obvious one, but it all starts with deciding to put the plan together, bringing all the other 19 points into a beautiful living, breathing ideal of what you consider your perfect retirement. Using The Guided Retirement System, we can build you a plan covering the factors we’ve covered today in this article. 

2020 is upon us, and it’s time to get into gear and put your plans to retire in motion. Start with looking forward to the longest vacation you’ll ever take, put the plan together, execute the plan, and in the end, enjoy the retirement you planned. 

We want you to retire and create memories that last with your family, create a lasting legacy, and, most of all, live your one best financial life. If you’re ready to start 2020 right, reach out to us by filling out the form below or giving us a call at 913-393-1000. We’re excited to help you live a rich life. 

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Investment advisory services offered through Barber Financial Group, Inc., an SEC Registered Investment Adviser.

The views expressed represent the opinion of Barber Financial Group an SEC Registered Investment Advisor. Information provided is for illustrative purposes only and does not constitute investment, tax, or legal advice. Barber Financial Group does not accept any liability for the use of the information discussed. Consult with a qualified financial, legal, or tax professional prior to taking any action.