Get ahead of the crowd with Premium
Register Forgot password

Retirement Checklist: 5 Steps to Take Once You Turn 65

Moneymagpie Team 1st Nov 2022 No Comments

Reading Time: 4 minutes

For many, turning 65 marks a major life shift. You’re ready to enjoy your golden years after decades of hard work. But turning 65 also means full or partial retirement for many. Your income sources and tax situation can change. You may now qualify for tapping into your retirement assets and government benefits. You may want to consider what will happen to your assets after you’re gone. It’s a lot to think about. To help you out, we’ve prepared a five-step checklist of things to do once you reach age 65.


1. Prepare for Medicare and Social Security

Health care costs tend to go up as we get older, so signing up for Medicare is a vital first step at age 65. You can apply for Medicare Part A and B up to three months before your 65th birthday. This helps ensure you get Medicare Coverage the moment you turn 65. You can sign up later, but you may risk having a gap in coverage or needing to pay a penalty.

As for Social Security, you can start receiving it as early as 62 or delay it to age 70. The later you delay it, the larger your monthly benefit becomes. If you’re already taking Social Security, no action is needed. If not, you will have to apply. You can apply up to four months before you want to start receiving Social Security.

2. Reassess and update your estate plan

Your estate plan lets you choose how your assets are distributed when you pass away. This ensures your wishes are met and helps avoid probate court and potential family fights. Many name their spouse, children, grandchildren, or other family members as beneficiaries. If you’re passionate about a specific cause or movement, you may be able to designate a qualifying charitable organization as a beneficiary. It’s wise to work with an estate planning attorney since they can help ensure the estate plan meets your exact wishes.

3. Get a life insurance policy

Life insurance for seniors pays your beneficiaries a substantial benefit if you pass away during the policy term. It can help your partner replace your income, cover expenses, and pay off your debts.

You can also continue building wealth while protecting loved ones by getting a permanent life insurance policy. These come with a cash value growth component. Part of each premium goes into this component, which grows tax-deferred at a specified rate that varies by policy type and insurer. You can withdraw from or borrow against cash value when it’s large enough. You can also receive the full cash value minus surrender charges if you surrender the policy.

Senior life insurance can also help with estate planning because the death benefit is tax-free. That means your heirs can receive more wealth than if you had passed down pure cash or another asset.

4. Look over your retirement savings and investments

Many seniors draw a substantial portion of their living from retirement savings and investments they worked hard to build. So, it’s generally recommended to reallocate your portfolio away from growth-based investments to safer assets that fluctuate less and potentially generate income.

That said, everyone has different goals. Some seniors may be comfortable with more risk and potential reward if they have assets elsewhere or lower living expenses. Other seniors may still work full-time or part-time and want to continue contributing or rely less on those assets in retirement. You can work with a financial advisor to help determine the best investment mix for your needs and goals.

5. Get ready for tax changes

Taxes can seem more complex once you retire. This is because you may have several income streams, each with different tax consequences. Plus, deductions for retirement contributions could decrease now that you’re withdrawing from those funds. This can mean more time for tax planning.

Consider working with a tax advisor. They can help structure your withdrawals and other income sources to minimize taxes without sacrificing your desired lifestyle. Additionally, think about where you live. States and cities can differ in whether and how they tax income, various investments, and property. You may consider moving to a more tax-friendly jurisdiction if it fits your lifestyle preferences and other matters.

Prepare for retirement with these 5 steps

Before you head off on your retirement travels, getting your finances in order is critical. This will give you more time and headspace to make the most of retirement. Start by applying for Medicare and Social Security, then reassess your net worth and put together an estate plan with an estate planning attorney.

Your estate planning is also a good time to see where life insurance fits into your financial picture. It can protect your spouse and help your heirs enjoy more of the assets you leave behind. After finishing these longer-term steps, look over your retirement savings to ensure your investments match your goals and risk tolerances.

Consider other income sources and living expenses when doing this. Evaluate the tax consequences of your income and location as well, and hire a tax specialist if necessary. Follow this checklist to knock out some vital retirement moves and enjoy your golden years with fewer money worries.

DisclaimerMoneyMagpie is not a licensed financial advisor and therefore information found here including opinions, commentary, suggestions or strategies are for informational, entertainment or educational purposes only. This should not be considered as financial advice. Anyone thinking of investing should conduct their own due diligence.

0 0 votes
Article Rating
Notify of

Inline Feedbacks
View all comments

Jasmine Birtles

Your money-making expert. Financial journalist, TV and radio personality.

Jasmine Birtles

Send this to a friend