Five Things to Do a Year Before You Retire

You're retiring next year—congrats! Now let's make sure it goes smoothly.

Retirement is one of those milestones that seem far away until they're suddenly right on top of you. After decades of working and saving for retirement (you did save for retirement, right?) you’re suddenly faced with actually retiring. And your final year before retirement could be really fun and exciting—work problems don’t matter so much, and you get to make lots of fun plans for your upcoming free time—or really scary. Either way, now is the time to take the essential steps to ensure you’re ready for what’s coming.

This isn’t just about prepping your retirement accounts and investments (though you should definitely meet with your financial advisor and ensure you’re in good financial shape). You should also consider taking the following five steps when you're about a year out from retirement—because it will be harder to do them later.

Make the most of your benefits (including your PTO)

Your job offers benefits that are part of your overall compensation. It’s always important to make sure you use all of them that you can, both because they’re owed to you, and because you shouldn't leave anything on the table.

Review your employer’s policy on paid time off (PTO). Do they let you bank those days? If so, how many do you have sitting unused because you’re as American as apple pie and never go on vacation? Will your company pay those out to you in cash when you retire, or will you lose them? If it's the latter, start planning how you can use them now. Having some extra time off before you officially retire isn’t the worst thing, and certainly better than letting all that time or money go to waste.

In fact, you should review all the benefits you get through your employer to see what you should be taking advantage of before you leave and lose access to them. Everything from health and lifestyle programs, to tuition reimbursements, to employee discount programs should be milked for everything they’re worth, because once you turn in your paperwork they’ll be gone.

Consider a HELOC/Refinance

If you have a big expense coming up in the near future, you should consider how you’ll pay for it now, before you actually retire. That’s because refinancing your mortgage, opening up a home equity line of credit (HELOC), or getting a home equity loan can be more difficult when you’re retired, as you don’t have the steady income of a paycheck, and banks sometimes struggle to make their standard models work. HELOCs can be dormant for many years, so having one on hand can mean you have the funds you need for major repairs or other projects in the future.

Proceed with caution here, however: If you haven't identified a use for a HELOC, the potential risks of having one—including spending the money just because it’s there—may not be worth it. But if you think you might need to tap into your home’s equity, setting it up before you retire will be easier.

Get a complete medical checkup

If you’re a year out from retirement, you’ve probably already looked into how you’ll get health insurance coverage after you leave your job, whether using private insurance or Medicare and some kind of “gap” insurance plan. But whatever your plan is, you should get a thorough physical checkup now, when you’re still around a year away from retirement. The coverage you have through your employer may be superior to Medicare, so finding out you have a serious condition or need expensive surgery now might save you a bundle over dealing with it when it’s all on your own dime. Even if that’s not the case, or you decide to put off treatment for reasons other than finances, knowing that you might have to deal with something will allow you to plan ahead instead of having to react later.

Give your retirement budget a test run

You made a budget for your retirement years, didn’t you? Well, the time to test it out is while you’re still working. You’ve come up with numbers—income versus expenses—but you won’t know whether they actually work until you've lived with them. While you still have a year of work left, try living on the income you expect from your retirement assets (including Social Security, if you qualify). It won’t be a perfect model because you’ll still be in work mode and possible spending money you won't have to once you retire, but it will give you some idea of how realistic your estimates are. If you find yourself miserable and struggling, you’ll need to reshape your plan—and having the option of working a little longer might be a life-saver. Even if you stay committed to your retirement date, you’ll have time to figure out side hustles or expense reduction options in a calm and efficient manner.

Research your Medicare options

Finally, take the year and do some research on your health insurance options. Medicare is complicated, folks, and messing up your coverage or not having the right supplemental plan can not only hurt your health and wellbeing, it can make a deep dent in your pocketbook. The time to ensure you really, actually understand it is now, while you’re still covered by your employer’s insurance and you still have the flexibility to change your retirement plans or financial strategy.

If you do these five things, you’ll (hopefully) face ignificantly fewer regrets in retirement—and that peace of mind will be priceless.