It doesn’t matter if you’re well into your working years or you’re just about to take the final step into retirement, because there are a few things that should be considered before.

An important fact is that you should determine your retirement needs. You will have expenses and sources of income that should be identified.

Many say that the right thing to do is starting early, but what if you didn’t do it so far. Is there anything that you can do? The answer is simple, yes, but we’ll go step by step.

The retirement checklist is different for those that are already saving and for those that are close to retirement. Anyways, following a few basic elements could lead to an effective plan.

1. Determine your retirement needs
Identifying potential expenses and potential income is crucial. Make the difference and see what you need to live a comfortable life. The sum could be big, but it’s for 20 or 30 years, don’t get too excited.

2. What to invest in
It’s very important to decide what to put your money in because you should know there is risk involved when you have to deal with stocks, bonds or cash. If your portfolio is rich in stocks then you need to adjust your asset allocation in response to significant market moves. Same goes for bonds or even cash. Make sure you always know what’s going on with your retirement plan and act accordingly.

3. Getting more
The money will work for you. It’s a true, old saying. If you start early or contribute as much as possible to a retirement plan (employer or sponsored) you’ll get the benefits later.

4. Asset distribution
If you have everything solved and you are near retirement, asset distribution is crucial. Set your annual withdrawal rate and make sure the possibility of outliving your money is null. This is something you may want to talk to a retirement adviser or a retirement planner. I know that whenI will retire, I will do it myself using an Excel spreadsheet with 25 years time frame where I can track costs (consider inflation, too), income from investments, major and medium purchases, income from SS and pensions.

These above, are a few general rules to follow when retiring, but here are a few questions you may want to ask yourself before actually doing it or when planning for it.

• Have you allocated your assets so that you can reach your goal in a certain time frame? Does it suit your risk tolerance?
• Contributing to a traditional IRA or a Roth IRA might bring you benefits. Checked that out?
• Do you know your payout options?
• Costs and income. How deep did you go? Are you sure you’ve included them all?
• The amount of your annual required minimum distribution (RMD). Do you know it?

If you guys can add more, this would turn out as mini-guide to retirement. What do you think of it?

photo by Jeff Holbrook