What Do You Do About Retirement Planning When You Have Just Retired?

This phase lasts from the day you retire until you are 70 years old. For those who do not plan to retire until well into their 70s, the first two tasks of this phase may occur later. A key purpose of this phase is to create a clear communication channel with your family so information can be shared, questions asked and answered, and decisions made in a calm, supportive way. If inter-generational communication around money has not been part of your family culture, it may be useful to enlist the help of a third party to get the process going.

There are three primary tasks during this phase. One is to assess how well your finances are working now that you are using your retirement savings. Do you need to modify your investment strategy? Make changes in your living circumstances? Have unexpected events occurred that require re-evaluating your approach?

The second task is to fine-tune your income and expense projections. Although the life expectancy of someone who is 60 years old is estimated by the Congressional Research Service to be 83 years old, many financial planners suggest projecting cash-flow out to age 100, just to be safe. This projection, which includes assumptions about growth of savings, inflation, taxes and living expenses, is an important tool in managing your finances and in making decisions.

The third task involves taking into consideration how you will meet minimum distribution requirements from your tax-deferred accounts — IRAs, 401(k)s, etc. — when these required withdrawals kick in at age 70. Even if you have not retired by this point, minimum distributions must begin.