7 Things to do Before Retiring

Are you retiring soon? It sure is exciting, and you may even be feeling nervous, like before going on a trip. And, just like before going on a trip, there is a list of things to do. Here is one for your retirement.

1. Make a budget

Your expenses and your earnings will change in retirement. It is important to be aware and balance them out by making a budget based on your new reality.

The information found in How to manage your expenses in retirement? will give you tips on how to balance your budget.

2. Determine a withdrawal plan

If you want to make sure that you have enough money to last you through retirement, you need a withdrawal plan. The plan provides for how and when you will withdraw your various sources of income during retirement. Once your plan is determined, review it annually based on changes in your situation or in taxation, for example, if you earn income from part-time work.

The What is a withdrawal plan? content explains in further detail how to establish your plan.

3. Repay your debts

Free yourself of as much debt as possible before you retire! If you still have debts to pay off when you stop working, you will have less money from your retirement income to spend on your projects and living expenses. This could make you more vulnerable. If you still have debts when you retire, you need to take them into account in your budget.

The How to deal with your debts? content offers tips to free yourself from your debts.

4. Consider applying for a home equity line of credit if you are a property owner

Do you own a house, a condo or a cottage? Maybe it is worth taking out a home equity line of credit or keeping the one you have, even if your mortgage is paid off. It will give you some security should an unforeseen event occur, and you will have access to money at a lower interest rate if you need it to remain in your home. But be careful: it is best to use it only when you really need it!

Read Can being a property owner help you for your retirement? to find out more on the home equity line of credit.

5. Use the tax credits offered

Verify whether there are tax credits you could receive in retirement, especially those offered as of age 65 or for certain types of income, for example, the amount for pension income or the amount granted based on age. It is something you can include in your withdrawal plan. By using tax credits, you could reduce the amount of income tax you owe.

To find out more, consult the Are you retired? Here are the tax credits you could be entitled to web page.

6. Verify your protections

Do you have health and prescription drug insurance?  Verify whether you can keep your group insurance offered by your employer once you retire. There may be certain conditions, or a program offered to retirees.

Are you in good health? That is great news. However, in several years, you may no longer be able to manage your finances and make informed decisions. It is not pleasant, but you have to protect yourself. How? Using a protection mandate (previously known as a mandate in case of incapacity), which is ideally filed by a notary. You can also sign a Power of Attorney. Consult the Chambre des notaires du Québec's website for more information on the protection mandate  and the types of powers of attorney .

7. Prepare yourself mentally

Once all that is done, you need to prepare yourself mentally. There is an important psychological aspect that should not be overlooked when transitioning into retirement. Often, we do not realize that we will have a lot of free time ahead of us. It is highly recommended to prepare for it and organize your time a few years before you decide to retire.

For further information, the Réseau Résilience Aîné.es Montréal offers leaflets on life in retirement  on its website. You can also read books that were written on the subject.

If you would like to know more about these seven things to do before retiring, watch our videos on the subject. Do not hesitate to seek assistance from your advisor!