The Financial Planning Checklist Every New Retiree Should Complete in Their First Year
Retirement changes more than your schedule. It changes how you use your money.
After years of saving and accumulating assets, you're entering a stage where your investments may need to produce income, your tax situation may change, and your estate plan may need a fresh look.
Your first year of retirement is a good time to make sure all the pieces still work together.
Here are six financial planning steps every new retiree should review.
1. Review Your Current Portfolio
The portfolio that helped you get to retirement may not be the same portfolio you need in retirement.
Once you're withdrawing rather than contributing, a significant market decline can have a very different impact. Review your current portfolio to determine:
How much risk are you actually taking?
Does your portfolio match your new income needs?
Do you have sufficient liquidity?
Are you properly diversified?
Are your investments aligned with your retirement goals?
Retirement doesn't necessarily mean eliminating risk. It means making sure the risk you're taking is intentional and appropriate for your circumstances.
2. Consolidate and Evaluate Your Investment Strategy
If you've changed employers during your career, you may enter retirement with multiple 401(k)s, IRAs, brokerage accounts, and other investments.
This can make it harder to understand your true asset allocation, manage withdrawals efficiently, and evaluate whether your overall investment strategy still fits your needs.
Consolidating accounts when appropriate may simplify investment management, beneficiary reviews, income planning, and your overall financial picture.
Before rolling over a 401(k), however, compare the investments, fees, services, withdrawal rules, and other features of your existing plan with the alternatives.
Use this review as an opportunity to evaluate your broader investment strategy, including your asset allocation, diversification, risk level, liquidity, and approach to generating retirement income.
3. Create or Update Your Trust and Estate Plan
When was the last time you reviewed your trust and estate plan?
Retirement is an ideal trigger for creating or revisiting your estate documents, particularly if they were created years ago.
Review your:
Living trust
Will
Powers of attorney
Healthcare directives
Beneficiaries on retirement and financial accounts
Make sure the people you've named, the assets you've accumulated, and the instructions you've established still reflect your wishes.
Your financial advisor can help coordinate with your estate attorney so your financial and estate plans work together.
4. Build a Tax-Efficient Income Stream
A paycheck may have stopped, but your expenses haven't.
Determine which accounts will fund your lifestyle and in what order. That may include Social Security, pensions, retirement accounts, taxable investments, cash, and other income sources.
The goal is not simply generating income. It's creating a sustainable, tax-efficient withdrawal strategy while considering investment risk, tax brackets, required minimum distributions, and the long-term impact of your decisions.
Depending on your circumstances, the years between retirement and required minimum distributions may provide opportunities to evaluate strategies such as Roth conversions, charitable giving, or strategically realizing income.
Rather than asking “How much tax do I owe this year?”, consider asking:
“How can today's tax decisions affect what I pay throughout retirement?”
5. Review Social Security and Medicare
If you haven't already claimed Social Security, determine how your claiming age fits into your overall retirement strategy.
Medicare also deserves attention. Understand your coverage, supplemental options, prescription benefits, and how your income can affect Medicare premiums through Income-Related Monthly Adjustment Amounts (IRMAA).
Reviewing Social Security and Medicare together can help you make more informed decisions about your retirement income, healthcare costs, taxes, and overall financial plan.
6. Define Your Legacy Plan
Finally, step away from the spreadsheets for a moment.
What do you want your money to accomplish during your lifetime and after you're gone?
Your legacy plan may include leaving assets to children or grandchildren, supporting charitable organizations, helping family members, funding education, or creating a lasting impact in your community.
Clarify your priorities and make sure your beneficiary designations, trust documents, gifting strategies, and broader financial plan support those goals.
Your First-Year Retirement Checklist
Review your current portfolio
Consolidate and evaluate your investment strategy
Create or update your trust and estate plan
Build a tax-efficient retirement income stream
Review Social Security and Medicare
Define your legacy plan
Would you like a printable version of our checklist? Just reach out to us to get one!
Retirement Is a New Financial Phase
The first year of retirement isn't just about adjusting to life without work. It's an opportunity to make sure the wealth you've spent decades building is structured for what comes next.
At Independent Wealth Solutions, we help retirees throughout Encinitas and North County San Diego bring investments, retirement income, taxes, estate considerations, healthcare decisions, and long-term goals together into one coordinated financial plan.
Recently retired? Your first year is a great time for a comprehensive financial review. Let's make sure your plan is ready for the years ahead.
