Wednesday, June 20, 2007

Ok I'm Ready to Retire, Now What?

If your one of those people getting very close to your retirement date, you are very lucky and perhaps a bit over whelmed by it all. After all, how does one actually retire? Well before you hand in your notice to your boss. I suggest a few things you need to get in line.

Make use of any health benefits you have currently, because you won't have them in retirement. So see your dentist and get everything that needs to be done. Then your optometrist and also make sure you get a full physical with your family doctor before leaving work. Also talk to your doctor about getting a longer perception if you take something regularly. You basically want to max out every benefit you can before leaving.

Apply for any lines of credit, credit cards or any other type of credit you might need for the next twenty years as your income is going to drop and that doesn't look good when applying for new credit.

If your old enough to get Canada Pension Plan and/or Old Age Security you want to apply about six months or more before you want that first cheque.

Start planning your time in retirement. What hobbies are you going to do? Are you planning on some work in retirement? If so, doing what and where? Ask yourself a lot of questions.

Avoid handing in your retirement notice early. You might be cutting yourself out of a nice early retirement package or other buyout if it comes up before you leave.

Once you have given notice make sure all your company paperwork is up to date, especially understand what you can do with your pension money. Also if you have any stock options, make sure you understand what happens to them before you leave.

Last but not least, make sure you know where all your money is and you might want to consider adjusting your portfolio to a much more conservative setup focused on protecting your capital. After all once your out of work you don't want a stock market correction to wipe out half of your retirement funds.

You might also want to consider getting any expensive home maintenance issues dealt with before you stop working. The last thing you need to start a retirement, is a renovation job that goes way over budget.

Well that's my list. If you have something to add please share.


FourPillars said...

Before you quit I would suggest talking to the bosses and let them know you're thinking of leaving. If they are planning layoffs anyways, they might be happy to give you a package rather than lay someone off who would rather stay.


FinancialJungle said...

Wow. You put a lot of thoughts into this. :)

Also ensure your company will buy out the remaining accumulated vacations.

Canadian Dream said...


That's a hard one to say if it would work out that way. It depends on how you feel about your work place.


What vacation? Use it all up as you walk out the door. Nothing like getting paid for a while when starting retirement.


FourPillars said...

I know a couple of people who did it with my company.

Obviously the odds aren't good but if you know you'll be leaving for sure then it's worth a try.


Qcash said...


The comment about rebalancing your portfolio is especially relevant. But I would suggest doing this over a couple of years prior to retirement.

The tax hit as you try to rebalance all at once could be staggering.

After six months, I am still not exactly where I want to be with my portfolio, but the juggling of the last couple securities may have to wait until next year, even though there are some good opportunities now. I just can't afford the tax.


Great article.

Q said...

Great post CD. Linked to it today!