Retiring This Year? Here is a Preretirement Checklist

If you are retiring soon, here are some steps to take to create a solid plan.

Retiring can be one of the biggest decisions a person makes in their lifetime and should not be taken lightly. Preparation can be a key component to an enjoyable and financially secure retirement. If you plan to retire this year, there are a number of things you can do to prepare. 

I have put together a list of decisions to address prior to retiring. This is by no means an exhaustive list, but rather a compilation of common considerations that can help improve your chance at a successful retirement.

Decide what you will do to occupy your time

It’s hard to stress how important this is, but it is huge! Retirees are often so excited for the free time they will gain in retirement that they don’t think about how they will spend it. Once the novelty of a schedule-free, work-free life wears off, many retirees find themselves feeling unproductive, bored, and even depressed. Scheduling time for enjoyable activities and social interactions can help you to feel productive and fulfilled. Having a plan to occupy your time will help you ease into your new phase of life.  It will also help to determine your financial needs based on what your expenses will be. 

Get an estimate from your agency

This is something that would be best to do a year ahead of time. Once you get the estimate, you can verify the accuracy by performing your own calculations or going over them with your advisor.

Take a trial run

I have written about this in my other articles, and I still highly recommend it. Once you receive your estimate, or determine your anticipated retirement income, take a trial run. In other words, try living on the income you will receive in retirement for a six month time period. This test will give you a real life simulation of living on your new income. If you find this period difficult or undesirable, then you still have the option of working longer to boost your savings.

Max out your TSP

Tax shelters should be one of the first things that you consider before investing. Employees have the advantage of contributing to TSP, but only while working. If you are retiring early in the year, or mid-year, you may want to contribute the max to TSP prior to your retirement date. Keep in mind, contributions up to 100% of pay can be made to TSP and Roth TSP (although taxes must be paid on contributions to Roth TSP.

Contribute to a Roth IRA

Roth IRAs are another tax shelter that should be considered prior to retirement. Here’s why: only earned wages can be contributed to a Roth IRA and retirement income doesn’t count as earned wages. For many, this means they are only eligible to contribute to a Roth while they are working. I have yet to meet a retiree that regretted having too much income tax free money in a Roth. I have, however, met hundreds that regret not contributing to a Roth while they were still eligible. 

Use your Flexible Spending Account (FSA)

If you contribute to your FSA, you will want to be sure and use that money prior to retirement. 

Decide what to do with TSP

This is another huge decision when it comes to retirement. There are advantages to having money in an IRA and advantages to having money in TSP. While there is nothing inherently wrong with moving money out of TSP, you’ll want to make sure you do it for the right reasons. TSP and IRAs both operate differently prior to age 591/2.  The most common product that I hear pitched to feds is a fixed annuity.

Assess your survivor’s income

If you die a week into retirement, what kind of income will your spouse be left with? What will the sources of that income be? Do you need to take the full survivor annuity? Take time to make sure that your loved ones will be provided for and you make the proper survivor annuity decision. 

Decide what to do with FEGLI

FEGLI is federal employee’s group life insurance plan. Similar to most plans, the premiums go up with age. You can continue FEGLI into retirement as long as you have had it for the previous five years, but it will likely be very expensive. If you want to carry some life insurance in retirement, it would be best to evaluate your options with FEGLI as well as private insurance. Here is a quick video explaining Basic FEGLI.

Determine whether you need long term care insurance

Long term care needs can easily cause a family to spend all of their assets on care. The problem here is that all of the assets could be spent on the spouse needing care and leave the healthy spouse with no assets to live on. Most states require assets to be spent down to around 100k before they will offer any assistance.  Long-Term Care (LTC) Insurance is a way to protect both your assets and the healthy spouse’s lifestyle. You may not think that LTC insurance is for you, but it is too big of a risk for married couples to ignore.

Decide what your Social Security collection strategy is

There are a ton of nuances when it comes to choosing the right social security collection strategy. One of the main factors influencing your strategy will be timing–when you will need to collect. There are significant differences in benefit amount if you collect at age 70 versus age 62. You’ll also need to consider the impact your collection strategy will have on your spouse. Aligning your collection strategies will help you maximize your household income.

Evaluate your investment allocation

Running out of money tends to be one of the biggest retirement fears. Do some research into what kind of drawdowns your portfolio has had in the past. If you have a 60/40 allocation, what is the anticipated drawdown in a bear market and are you comfortable with that? Spend some time to determine what allocation and investments will provide you with the best income in retirement. 

Run a Monte Carlo analysis

Monte Carlo is an analysis that can show you the odds of not running out of money in retirement. The analysis does 1,000 random simulations that will show you results through all different types of sequences of return, and ultimately give you a percentage of the likelihood of success.

Do needed home repairs

You may have more time to do repairs after retiring, but you probably have more funds to do them prior to retirement. Remember that retirement savings are designed to provide an income, they are not a bank account to pay for home repairs and other expenses. Expenses are ideally paid out of cash flow, just like they were when you were working.

Buy newer cars

This is another example of a big expense that could come up in retirement. It may be best to take care of the expense prior to retiring. 

Consider a Roth conversion

This may or may not be a good idea in the year you retire, but it’s something to evaluate annually.

Make sure you have had FEHB for five years

The Federal health plan is one of the best benefits of being a federal employee and it continues into retirement—but only if you have held it for at least five consecutive years prior to retirement. There are a few exceptions to this rule, but if you are close to the five year mark and are able to continue working, you may decide to stay in the workforce and secure the FEHB for your future.  

Set a budget

There is no more important phase of life to set a budget than retirement. Not sticking to a budget in retirement years is one of easiest ways to run out of money. 


This completes my list for today. Tomorrow I will probably come across other aspects of retirement to evaluate, but this should give you a good start.

The list happens to contain many things that I assist clients with. If you find yourself overwhelmed by these decisions and retirement in general, seek help from someone that specializes in federal retirement sooner rather than later!

About the Author

Brad Bobb is a financial planner with over a decade of experience working with federal employees. He is acutely focused on the financial livelihood of employees who are part of the CSRS or FERS systems. Any federal employee wanting more information about Brad can visit