What to Do a Year from Retirement

What to Do a Year from Retirement

Time flies! One day, you’re starting a new job and retirement seems like an out-of-reach dream you have “plenty of time” to worry about. Then, just like that, you’re looking retirement in the face. Are you ready to make the transition?

You may think you’re ready – you’ve waited for the day you no longer have to commute and instead can travel and start checking things off of your bucket list. But are you financially ready to live that kind of lifestyle? Are you emotionally ready to leave your working life behind? What if you’re forced to retire earlier than expected, either due to unexpected job loss stemming from the COVID-19 shutdowns or because of personal reasons? What will that do to your long-term plans?

This is why starting your retirement planning early is so important. “I have a lot of time,” can quickly turn into, “Wow, it’s here already!”

As Sonoma County wealth advisors, we see this happen all the time.

If you’re planning to retire in 2021, there are a few things you should start thinking about now.

Discussing Your Plans with Your Financial Advisor

Before you officially enter retirement, there are a few important conversations you really need to have.

Your first discussion should be with your financial advisor. Is retirement really a possibility? You don’t want to find yourself in a situation where you’ve informed your company you’ll be retiring, yet you don’t have the funds to do so.

These are all important questions to ask before giving up your steady paycheck. You’ll also want to:

  • Review your budget for retirement
  • Review your plans for retirement
  • Discuss your plans to downsize, relocate, work part-time, start a business or sell a business you currently operate

Today, many people retire with multiple income streams from past jobs. If this is the case, make sure to round up any stray IRAs, retirement plan accounts and pension plans, and talk with your financial advisor about how they work together. What will they do to your taxes? To your estate plan? To your financial goals?

Talking about retirement with a financial advisor allows you to evaluate and refine the financial and lifestyle steps you need to take. So many people retire without adequate planning and with little consideration of what they want to do next. Don’t be one of them! Your retirement transition can be more orderly and less stressful when you have a plan.


It’s never too early to start planning for the future. Contact Montgomery Taylor Wealth Management and get the conversation started.


Discussing Your Plans with Your Family

Another important conversation to have is one with your spouse or other family members. At Montgomery Taylor Wealth Management, we have worked with couples who have completely different ideas of what retirement looks like. This can obviously be problematic.

Even if you are on the same page, you may not be retiring at the same time as your spouse, which means you will both have to adjust to a new schedule. Make sure both of you talk about the new situation, what your role around the house will be, and the adjustments other family members may need to make.

Discussing Your Plans with Your Employer

Informing your employer that you will be retiring may seem like a no-brainer, but many people miss asking important questions.

For example, is there any deferred compensation owed to you? Do you have outstanding vacation pay? There is nothing wrong with taking all of the paid vacation days due to you in the year preceding your retirement – you’ve earned them. If you know you will take fewer personal or vacation days than allotted to you, see if your company will let you convert the unused days to cash when you exit.


Does your employer sponsor a health plan for employees? If so, use those benefits for as long as you can. Standard Medicare will not pick up the tab for most dental care or optometry. See if your employer will extend your insurance benefits into retirement. Does your employer offer any life insurance or long-term care coverage options for its retiring workers?

Speaking of Medicare, are you eligible? There are exceptions, but generally, Medicare is available for people age 65 or older. Remember, there is a specific window of time that you will need to enroll. If you’re retiring before then, where will your healthcare benefits come from? Healthcare costs can take a big bite out of your budget. A common misconception is that Medicare will cover all of your medical expenses, but that’s not the case. Talk to your financial advisor about buying a Medigap policy to cover the difference.

You should also talk with your financial advisor about long-term care insurance and other coverage that makes sense for your situation.

Eliminating Debt

When you’re a year or so from retirement, work to reduce your debt as much as you can. Talk with your financial advisor about a plan to pay off debt, including your mortgage, if appropriate, or school loans. Retiring with considerable debt gives you less money to live on.

Real estate costs are a large part of Americans’ budgets. That may change in retirement if you have a paid-off mortgage and plan to stay in the home you own, or if you have enough equity in your home to sell and move into something you can pay for with money made from the sale. You may always have to pay property and other taxes, as well as maintenance and upkeep costs, but getting rid of a monthly mortgage payment will make your overall housing costs lower.

Retiring in 2021?

For many people, 2020 was a challenging year, and the Coronavirus pandemic had a big effect on many retirements.

If you’re planning to retire in 2021, get the conversation started as soon as possible.

Montgomery Taylor Wealth Management is passionate about helping clients plan for the retirements they want. A Santa Rosa-based firm, our Sonoma County wealth advisors understand the unique concerns retirees have in the Sonoma County area. Our team of financial advisors, certified public accountants and estate planning attorneys provide clients with integrated, complete financial advice to help simplify life and maximize opportunities. If you’re currently looking for a financial advisor in the Sonoma County area, contact us and get the conversation started! Retirement will likely be here before you know it!

Montgomery Taylor Realistic Financial Planning