What is the first thing to do before retiring?

What to do first before retiring: a clear, evidence-based starting point

Before you decide a retirement date, the most useful single first step is a comprehensive financial assessment. Federal and consumer guidance in recent years recommends documenting net worth, projecting income and expenses, and reviewing benefits such as Social Security and pensions as the starting point for retirement planning tips, because these items together show whether timing changes will affect lifetime income Planning for Retirement: Checklist and Tools.

This assessment matters because small changes in claiming age, withdrawal timing, or taxes can materially alter lifetime income. Modeling multiple claiming ages and income scenarios can show trade-offs that are not obvious from a single snapshot. Use official calculators and careful notes so assumptions are clear and comparable.

Who should follow this approach? Anyone who is within a few years of their planned retirement date, or anyone reevaluating timing after a life change, can benefit. Households with limited emergency savings or those who have not recently updated benefit estimates should treat the assessment as urgent, and build a short action plan from the results.

Step 1 explained: how to run a comprehensive financial assessment

Start with a short checklist and work through it in order. First, list assets and liabilities, then identify expected income sources and recurring expenses. Write each item down so you can update numbers and re-run estimates as assumptions change. A clear inventory helps you see where a gap is driven by a one-time expense or by ongoing shortfall How America Saves 2024.

Numbered actions you can follow today.

1. Document assets: account balances, home equity, other investments.
2. List liabilities: mortgages, loans, credit card balances, and expected future debts.
3. Record expected income: Social Security, pensions, part-time work, and expected withdrawals.
4. Estimate recurring expenses and one-off costs such as home repairs or car replacement.

Include sensitivity checks. Run scenarios for higher longevity, higher health-care costs, and lower investment returns. For retirement-plan contributions and tax-sensitive items, verify current IRS contribution and catch-up limits so your projection uses up-to-date numbers IRS Provides Tax Inflation Adjustments for 2026.

Keep the assessment practical. If a number is uncertain, note a reasonable range and a central estimate. That range will guide whether you need to delay retirement, adjust withdrawal rates, or change saving patterns.

Begin with a net worth statement that lists assets and debts. Include retirement accounts, taxable investment accounts, checking and savings, home equity, other property, and outstanding balances on loans and credit cards. A fill-in-the-blank approach helps keep the task short and repeatable.

Example prompts you can copy.

• Assets: Retirement account balances, brokerage balances, savings, home estimated value, other investments.
• Liabilities: Mortgage balance, auto loans, student loans, credit card balances.
• Net worth equals total assets minus total liabilities.

Convert account balances into projected retirement income by estimating realistic withdrawal rates and checking pension terms. When you estimate withdrawals, include the sequence of taxable and tax-deferred distributions because taxes change the net amount you receive. For pensions, read plan documents for payout options and survivor benefits to include them accurately in projected income.

Verify Social Security estimates using official SSA tools such as the Benefit Calculators rather than rough rules of thumb, because the SSA estimator provides benefit estimates at different claiming ages and can be saved for comparison Retirement Planner: How Retirement Benefits Are Calculated.

Review Social Security and claiming options: what to check first

Checking Social Security early is essential because claiming age choices affect both monthly benefit levels and lifetime income. Use the SSA retirement estimator to model benefits at multiple claiming ages and compare scenarios side by side. You can also try the SSA Quick Calculator for quick comparisons Quick Calculator. The SSA estimator is designed for this purpose and should be part of the first assessment steps Retirement Planner: How Retirement Benefits Are Calculated.

When you test claiming ages, save the output and note the assumptions used. Small changes in claiming age can change lifetime income and interact with withdrawals and taxes. Comparing saved scenarios helps you see whether starting benefits earlier and taking smaller monthly checks is better or worse over a range of life expectancy assumptions.

Keep in mind that Social Security decisions intersect with other income choices. For example, if you expect to withdraw from tax-deferred accounts, the timing of those withdrawals can affect taxable income and the net benefit of a given claiming strategy. Record how you think withdrawals, pensions, and part-time work will change the tax picture so you can compare integrated scenarios.

Emergency fund and conservative expense projection: a safety-first check

Create a conservative retirement budget that separates essential from discretionary spending. Essentials typically include housing, food, utilities, health-care premiums and out-of-pocket costs, insurance, taxes, and minimum debt payments. Discretionary items can be adjusted if the assessment shows a gap.

Surveys and household data show many people have limited emergency savings, so checking emergency savings is a concrete risk-control step before finalizing retirement timing. If you lack a three to six month buffer for essential expenses, mark that as an urgent gap to address in your short action plan Economic Well-Being of U.S. Households in 2023.

Build a conservative projection by assuming some health-care costs will be higher than current expenses. Factor in possible increases in premiums and unexpected care. If health coverage will change at retirement, list how premiums, deductibles, and out-of-pocket maximums will change and treat the higher side of reasonable estimates as your planning baseline.

Prioritize urgent gaps. If the assessment shows a short emergency buffer or unaccounted-for health costs, include actions to address those within 30 days, such as moving discretionary savings into an accessible account or scheduling benefits enrollment checks.

Tax, contribution limits, and other decision factors to include

Include recent IRS adjustments when you model retirement savings and taxes because contribution and catch-up limits changed through 2026. These limits affect how much you can shelter pre-tax income and how catch-up contributions change the savings path for people near retirement IRS Provides Tax Inflation Adjustments for 2026.

Taxes also change the net value of withdrawals. Model withdrawals under plausible tax rate scenarios and note how Social Security benefits may be taxed when combined with other income. When taxes materially change a projected outcome, document the assumptions and plan to verify them with primary IRS tools or a tax professional.

Other decision factors include timing of required minimum distributions, pension payout choices, and how part-time work could affect benefit eligibility. Keep a short list of items that require specialist input so you can target professional help efficiently if needed.

Common mistakes and a one-month action plan to avoid them

Typical mistakes include skipping Social Security projections, underestimating health-care costs, ignoring short-term cash needs, and failing to document assumptions. These errors can be costly because they lead to overconfidence about timing or required savings.

Use this 30-day prioritized checklist template to reduce inertia.

1. Day 1 to 7: Complete the inventory of assets and liabilities and run the SSA estimator for three claiming ages.
2. Day 8 to 14: Build a conservative retirement budget and check emergency savings. Move short-term cash to an accessible account if needed.
3. Day 15 to 21: Verify IRS contribution and catch-up rules relevant to you and update projections for taxes.
4. Day 22 to 30: Document assumptions, save all outputs and screenshots, and list unresolved questions to check with primary calculators or a professional.

Documenting assumptions is vital. Keep an assumption log that records the date, the source of each number, and the range you used. This log makes it easier to re-run scenarios if markets, taxes, or personal plans change.

Examples, next steps, and where to verify your numbers

Two brief scenarios can illustrate how an assessment affects timing. In a conservative scenario, a household with limited emergency savings and higher expected health costs might postpone full retirement until a larger buffer is in place or until a pension option that offers survivor benefits is chosen. In a moderate scenario, someone with substantial savings, stable health coverage, and reliable pension income might accept earlier retirement with a smaller withdrawal rate and pursue financial independence.

These examples are illustrative and not predictions. Use primary calculators to verify estimates. Key sources to check are the SSA retirement estimator for benefit amounts, the IRS pages for contribution and tax limits, and consumer guidance for retirement checklists and budgeting tools consumer guidance as well as official Social Security calculators Social Security retirement calculators.

Final immediate next steps: run the SSA estimator for at least two claiming ages, complete a net worth worksheet, build a conservative retirement budget, verify IRS contribution limits, and save all outputs in an assumption log. Re-run calculations if major assumptions change and keep the 30-day action plan handy.

Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.