Retirement Do's and Don'ts


1. Review your expected budget and cash flow. The first thing pre-retirees should do is estimate what their expenses will be in retirement. Plan for rising costs (i.e., inflation).

2. Save for a rainy day.  The vast majority of what you accumulate between now and retirement will be determined not by how well your investments perform, but by how diligently you set money aside. A good target savings rate is 10-12%.

3. Accept 'free money.' Many employer retirement plans such as 401(k) and 403(b) plans will match your contributions up to certain limits. Take advantage of this opportunity to ramp-up your savings rate and defer taxes.

4. Know the rules. When you leave an employer, it often makes sense to take your money with you. Understand your withdrawal options from retirement accounts to minimize taxes and risk while maximizing flexibility and growth opportunities.

5. Consolidate. Consolidating old retirement plans may be wise from an investment efficiency standpoint, but be aware of mixing different 'tax flavors.' Mixing after-tax money with tax-deferred or tax-free dollars can create a tax headache down the road.

6. Be debt-free. A debt-free retirement can be less stressful. However, the long-term benefit of systematic saving and investing often outweighs paying extra on loans. Examine interest rates and type of debt before deciding how and when to deploy surplus cash.

7. Time your retirment. If you like your job or don't have something you'd rather be doing, you might consider working a little longer. There are 24 hours in a day, and they can get long without a plan. Think about things you enjoy doing and find your passion once you retire.

8. Make your marriage work. Carefully review and understand the spousal options before making a pension election. You can't change your mind later, but you may wish you had.

9. Review your beneficiaries. Periodically review beneficiary designations on your retirement plans, annuities, and life insurance policies, and make sure your will and related documents are up to date.

10. Get financial advice. Retirement planning can be complicated. A trusted, experienced advisor can help you develop the right plan to maximize and maintain your lifestyle.


1. Forget about health insurance. Medicare doesn't start until age 65, which means early retirees could find themselves without coverage or access to their employer's health plan.

2. File for Social Security too early. While you can sign up for Social Security any time after age 62, your monthly benefits will increase for each month you want up until age 70. What may seem like a good choice now may leave important money on the table down the road.

3. Exceed the 'speed limit.' Leaving a large inheritance might not be your objective, but running out of money is a far worse fate. Pace yourself by adhering to an acceptable withdrawal rate based on your age and investment allocation. 

4. Put all your eggs in one basket. As you approach retirement, protecting what you've accumulated becomes as important as growing your investments. Begin to diversify within and across different types of investments.

5. Invest too conservatively. Just because you're retired doesn't mean 'pulling into an investment shell' is the best option. If all goes well, your retirment will last a long time, and inflation can chip away at your ability to maintain your lifestyle. When and how much money you will need will determine your investment allocation. Market fluctuations can be scary, but rising costs may pose an even bigger threat.

6. Panic over rough seas. Volatility is a normal and permanent part of investing, but volatility does not equal loss. A well-constructed, diversified investment portfolio anticipates and is built to weather inevitable 'storms' in the market.

7. Let the IRS control your taxes. Most assume taxes will be less of an issue in retirement, but without a plan to manage them, they may be in for an unpleasant surprise. Speak with a tax advisor about your situation, and available vehicles and strategies to minimize current and future tax liability.

8. Forget RMDs.  You must begin taking required minimum distributions (RMDs) by April 1st of the year after you turn 72, and by December 31st each year after from your tax-deferred retirement plans. Failing to take the required amount will result in a penalty equal to 50% of the amount that should have been withdrawn.

9. Neglect your family. Certain income streams reduce or stop when its owner passes away. Make sure your retirement income doesn't leave your loved ones stranded in the event of an early death.

10. Be too generous. Give to whom you desire to give, but not to the detriment of your retirement.