When it comes to planning for retirement, the sooner the better is always key. The more time you plan, the better the chances of having a financially sound and comfortable retirement.

Now don’t get me wrong, life loves to throw unexpected and unanticipated events at us, but that should not stop us from developing an action plan for our retirement.

Once you have officially established when you want to retire and have “run the numbers” to be confident you should have sufficient financial means to support your retirement years, then you will then need to start looking at your present financial situation — specifically, pay attention to how you can start to maximise your income and investments, but also begin to reduce your expenses.

Maximising your income often means eliminating any debt that you still currently have. Pay your debts off, and don’t go back into debt unless absolutely necessary.

It’s time to start paying you and contributing to your savings, instead of servicing your debt payments and paying interest to the bank. Furthermore, being strategic with your investment choices to ensure your risk tolerance aligns with your time horizon for retirement will be essential.

In addition, reviewing your expenses should also become a priority. As we earn more, we often continue to spend more. But as we slowly creep towards our retirement date, we really need to start identifying the needs versus the wants in our budget.

Moreover, what subtle changes can we make on the expense side to provide more savings that can be earmarked for future use in retirement?

So, when should you really start gearing up and focusing on your Action Plan for Retirement?

For a lot of people, planning for retirement overall normally starts about five years ahead of schedule, and the plan needs to include a lot more than just the financials.

The retirement action plan below is a helpful guide to keep you on track as you start planning and preparing for retirement. (It is important to note that the action plan is a guide and not meant to be an exhaustive list; there may be other items that are important to the individual and may not have been captured.)

Five years to retirement date

1, Meet with your pension provider and make sure to:

• Review your current pension plan account holdings and determine whether you need to start reallocating into less risky asset classes

• Consolidate any other company pension plans into one account where possible

• Discuss the rules and regulations regarding accessing your pension at retirement, especially if you are planning on retiring early

• Determine the benefits of making additional voluntary contributions.

2, Review your bank account(s); if you have multiples, do you really need them all?

3, Review your investment account(s); look at the asset allocations and make sure the investment allocation matches your time horizon.

4, Review your insurance policies (i.e. life, home, car), do they reflect current values?

5, Update your will or visit a lawyer and have one prepared, make sure to include an enduring power of attorney.

6, Update your beneficiaries on anything that has a listed beneficiary, that is, life insurance, pensions etc.

7, If you still owe anything, mortgage, car loan, credit cards, it’s time to pay those off.

8, Review present and future healthcare options.

9, Look at your cash flow. Can you decrease your expenses and increase your savings?

10, Determine where your retirement income is going to come from, including:

• Pension

• Rental collection

• Social insurance

• Investments

• Sale of family homestead

11, If you are still in the house in which you raised your family, decide on whether you plan to downsize your residence.

12, Chances are you, like many others, have accumulated a lot of “stuff”. Start going through things and if you haven’t used it in five years, perhaps it is time to sell it (especially as Bermuda has a great second-hand market for goods).

Two years to retirement date

1, Review your risk allocation again in your pension plan and start strategically lowering the risk level.

2, Crunch numbers for retirement income versus retirement expenses to ensure positive cash flow.

3, Consolidate your banking and bank accounts to make sure you are streamlined.

4, Start consolidating your investment accounts to ensure a clear investment strategy.

5, If retiring overseas – ensure you have shortlisted your proposed retirement locations and complete your retirement overseas plan.

6, All debt should be paid off with no further intention of borrowing.

7, If you are keeping the family house, renovations should be completed.

8, Review your current cash flow and determine changes you will make at retirement.

9, Finalise your plan for healthcare and determine what additional coverage will be needed.

10, Determine options for long-term care needs.

Six months to retirement

1, Request information on the various pension options upon retirement.

2, Obtain information on individual health insurance from local providers and start the process.

3, Request a copy of your Bermuda Social Insurance monthly benefits plan.

4, Adjust any immediate insurance needs.

5, Finalise annual or monthly retirement cash flow options.

6, Finalise retirement budget for expenses.

7, Organise your healthcare plan for retirement and complete the forms.

8, Review investment allocations for positive cash flow options.

9, If retiring abroad make decisions on accommodation – renting versus ownership.

10, Inquire about long-term care, especially regarding the cost of treatment locally or abroad.

11, Advise your employer of your retirement (if not before) to ensure they can plan your succession.

Retirement day

1, Create your retirement folder with all your financial and insurance information.

2, Plan a retirement trip.

3, Purchase your healthcare.

4, Have a retirement dinner with your family and friends to celebrate the next chapter.

5, If moving abroad, start packing.

If retirement is your goal, then it is always better to plan to give you the best chance of success.

• Carla Seely has 24 years of experience in the financial services, wealth management, and insurance industries. Over the course of her career, she has obtained several investment licenses through the Canadian Securities Institute. She holds ACSI certification through the Chartered Institute for Securities and Investments, UK; QAFP through FP Canada; and AINS through The Institutes. She also has a master’s in business and management