Starting the Retirement Planning Process

By Chris Duderstadt

January 23, 2023

Starting the Retirement Planning Process

Key Points – Starting the Retirement Planning Process

  • Retirement Calculators Aren’t the Answer to How to Start the Retirement Planning Process
  • Your Retirement Planning Process Should Be Unique to You
  • It Starts with Your Goals
  • Reviewing Our Retirement Plan Checklist and Guided Retirement System
  • 8 Minutes to Read

Getting Started Can Be the Biggest Barrier in the Retirement Planning Process

Whether it’s a working on a home improvement project, mustering up motivation to work out, or trying to eat healthier, the hardest part of each process tends to be getting started. The same thing can be said about the retirement planning process. How do you start the retirement planning process? How much do you need to get to and through retirement?

All too often, people want a quick answer to how much they need to retire and end up using a retirement calculator. Retirement calculators don’t factor in everything you need to consider in the retirement planning process, though. Here’s a quick list of important aspects of the retirement planning process that retirement calculators can miss.

Making a Retirement Checklist … and Checking It More Than Twice

When you’re starting to do anything for the first time, taking notes or keeping a list can be very helpful. With that in mind, we created a Retirement Plan Checklist. It includes 30 yes-or-no questions that reviews all the things—including several of the bullet points above—that you need to think about as you prepare for and go through retirement. Download your copy below to begin planning today!

Retirement Planning Process

Download: Retirement Plan Checklist

From taxes and health care to stress testing and risk management, the questions in our Retirement Plan Checklist cover a wide range of topics. If you’re able to answer “yes” on most of the questions, that’s great! It’s wonderful that you’re off to a good start with the retirement planning process, but don’t settle. As your life changes and economic conditions change, it’s important to do the proper planning so that your answers to these questions don’t change.

If you answered “no” to several of these questions, that’s OK. These questions are designed to gauge your retirement readiness and to help you start the retirement planning process. Make a note of those questions you answered “no” to and consult with a financial professional to see what you need to do differently. And even if you answered “yes” to a question, there may still be things that you’re not aware of concerning that topic. A financial professional can open your eyes to additional opportunities as you begin the retirement planning process.

When to Begin the Retirement Planning Process

In addition to the 30 questions on our Retirement Plan Checklist, there’s an age-based retirement timeline that notes things you should keep in mind at certain stages of planning for retirement. Most of the people who come to us for financial planning assistance are usually between five and 10 years from retirement. We commend those people for getting over that hump of starting the retirement planning process well before their desired retirement date.

10-15 Years from Your Retirement

However, you’ll notice that the retirement timeline on our Retirement Plan Checklist begins even earlier. Ideally, people will start the retirement planning process 10-15 years before retirement. The big focus during this timeframe is how you save and where you save. For a lot of people, the word “budget” has negative connotations, but creating a budget is one of the first steps toward gaining clarity in the retirement planning process. How much are you spending each month? How much of your paycheck is going into your 401(k) or other savings plans?

When saving to IRAs, are you saving to traditional or Roth IRAs? Understanding how retirement income is taxed is critical to the success of your retirement. And if you’ll go back to the list of things retirement calculators miss, look at the second point. Tax rates are about to go up in 2026 after the Tax Cuts and Jobs Act sunsets. Keep that in mind as you’re considering tax planning strategies like Roth conversions when trying to mitigate taxes throughout your lifetime.

Also, if you haven’t created an estate plan yet, now is the time to do so. Trust us that it’s much better to do this sooner rather than later (or not have one at all). There’s already enough stress that comes with the death of a family member. The transferring of assets after loss of a loved one can make that even more stressful if an estate plan isn’t in place.

Five Years from Retirement

If you’re not starting the retirement planning process until you’re about five years away from retirement, you don’t need to panic quite yet. The same things that we just reviewed in the 10-15-years-from-retirement range apply to you, along with a few other things to start considering. This is a good time to not only creating a spending plan for the next five years, but for the rest of your retirement. Your income sources are going to be different in retirement, and so is your spending.

Your 401(k) investments become that much more important the closer you get to retirement. Why? Because if there is a severe market downturn like the one we’ve been mired in for the past year, there won’t be as much time to adjust your investments. That’s one reason why the earlier you start the retirement planning process, the better.

As you’re nearing retirement, you need to be considering the first point that we listed on things retirement calculators miss. That’s insurance. Are you planning to retirement prior to 65? Well, you’ll need to figure out a plan for health insurance coverage before you get on Medicare. Health insurance is obviously just one piece of the big insurance puzzle. This is a good time to review your life insurance needs and other insurance coverages as well.

Two to Three Years from Retirement

As we shift toward two to three years from retirement on the retirement planning timeline, we should probably remind you that the focus of this article is on starting the retirement planning process. Look at how much we’ve already covered. You don’t want to be cramming all that plan work and then some in two to three years. The odds of feeling financial uncertainty will likely increase with having less time to plan, so if you haven’t consulted a financial professional yet, now is the time to do so.

If you have done all (or at least most) of the things on the retirement planning timeline up to this point, keep up the good work. There are a few very important things to consider at this time as well, though. Figuring out the best Social Security claiming strategy is toward the top of that list. The same thing can be said about planning for the possibility of a long-term care stay or death of a spouse. Yes, being this close to retirement should be an exciting time of your life. Hopefully you and your spouse will maintain good health and live long and healthy lives. Still, you need to be prepared financially if a health-related tragic scenario should occur.

One Year from Retirement

You’ve been working for your money for years and years to this point. If you put together a sound financial plan when starting the retirement planning process, it’s about time for your money to start working for you. Take this time to review everything you’ve done to this point in the retirement planning process. Are there any areas of your plan that you don’t feel comfortable about? This is another good time to consult a financial professional to make sure nothing is falling through the cracks.

Our Guided Retirement System Personalizes Your Retirement Planning Process

As we wrap up with explaining how to start the retirement planning process, we need to revisit the last bullet point on things that retirement calculators can miss. When we start taking people through our Guided Retirement System, it should be very clear that your goals are a pivotal piece of the retirement planning process. We’re going to give you a quick rundown of our retirement planning process within the Guided Retirement System and how it all begins with your goals.

The Discovery Meeting

We can’t start planning your retirement without getting to know you. What worked well for your best friend or family member might not work for you and vice versa.

During the Discovery Meeting, which is the first meeting within the Guided Retirement System, your advisor will go through a prioritization exercise that helps determine the most important things to you and your spouse. As we learn about the things you care about and your retirement goals, we’ll try to get a sense of how you think and feel about money. After all, most of the things that are important to you come at a cost. It’s our job to build a financial plan that allows you to accomplish your retirement goals while taking on the least amount of possible risk.

Speaking of risk, there are five points of data that we’ll want to gather along with your retirement goals that we’ll touch on briefly during the Discovery Meeting. We’ll expand upon these five points in future meetings as well. They are: risk, spending, saving, timing, and legacy.

The Delivery Meeting

After the Discovery Meeting, our integrated financial planning team convenes to review all the data that we gathered from you and your spouse. We want to assess what opportunities and obstacles to be aware while building a plan that is unique to you. Once our integrated financial planning team has met to go over that data, we’ll review it with you during the Delivery Meeting. We want to make sure that there isn’t anything pertinent to your retirement that we might have missed.

The fine-tuning that takes place during the Delivery Meeting isn’t taken lightly. If there are any aspects of your proposed plan that you feel needs to be altered, we’ll discuss them in the Delivery Meeting and hold a follow-up meeting(s), if necessary.

The Implementation Meeting

As we begin to finalize the building of your plan, we’ll hold an implementation meeting. During this meeting, we’ll walk you through our client portal so you can keep track of your plan. Your portal will be a secure place where you can link outside assets/liabilities and keep various important documents.

Review Meetings

As you can see, starting the retirement planning process takes time. It might seem like you’ve finally reached a stopping point once your plan is built, but you can’t just set it and forget it with your plan. As you go through retirement, your life is going to change. Your goals today compared to your goals a year from now or five years from now could be way different. We’ll want to update your plan accordingly during the ups and downs of your retirement to make sure you still have clarity and confidence about your financial life.

Along with meeting with you to stay up-to-date with your goals and other life changes, we’ll schedule some specific review meetings. We’ll meet with you for an annual tax planning review meeting with the goal of helping you pay the least amount of tax possible over your lifetime, not just in one year. We’ll also hold biennial estate planning and insurance meetings (one will be one year, and the other will take place the next). So, we’ll meet with you at least twice a year.

Some New Resources to Help with Starting the Retirement Planning Process

We can’t stress enough how important it is to have a fluid financial plan in place to start the retirement planning process. The process can only go so far without a plan. Whether you’re starting the retirement planning process or already retired, we have a new tool that can help with your planning. Our 2023 Retirement Planning Calendar notes various dates and events that can impact your retirement. Download your copy below!

Retirement Planning Process

2023 Retirement Planning Calendar

Last, but certainly not least, we’re giving you the opportunity to access our financial planning tool. This tool, which is the same tool that our CFP® Professionals use with our clients, incorporates the pillars of taxes, Social Security, estate planning, risk management, insurance, your goals, and so much more. It’s a tool for you to customize YOUR retirement from the comfort of your own home. You can begin building your plan at no cost or obligation by clicking the “Start Planning” button below.


Send Us Your Retirement Planning Questions

Starting the retirement planning process is essentially a big process within a big process, but our team is ready to help you through it all. If you’re having trouble getting started or have a question(s) about a specific part of the retirement planning process, please reach out to us. You can schedule a 20-minute “ask anything” session or complimentary consultation with one of our CFP® Professionals by clicking here.

We can meet with you in person, virtually, or by phone—whatever works best for you. We look forward to helping you start the retirement planning process and building a plan that takes you to and through retirement.

Investment advisory services offered through Modern Wealth Management, Inc., an SEC Registered Investment Adviser.

The views expressed represent the opinion of Modern Wealth Management an SEC Registered Investment Advisor. Information provided is for illustrative purposes only and does not constitute investment, tax, or legal advice. Modern Wealth Management does not accept any liability for the use of the information discussed. Consult with a qualified financial, legal, or tax professional prior to taking any action.