The Retirement Readiness Checklist

Most retirement planning advice is about the number. This is about everything around the number — the dozen or so decisions that turn a balance into an income, and the handful of risks that quietly decide whether the income lasts. None of it needs software to answer. All of it needs answering.

1. Income sources

Before anything else, know what arrives without you doing anything. Everything else in the plan is only there to fill the gap between this and your spending.

• I have written down every income source I expect in retirement, with the age it starts. Why: a pension at 62 and Social Security at 70 are two different plans, and the gap between them is the part people forget to fund.
• I know which of those sources rise with inflation and which are fixed for life. Why: a fixed $3,000 pension is worth about $1,800 in today's money after 25 years at 2% inflation. Fixed income is a shrinking asset.
• I have a current total of what I've saved, split by account type — taxable, tax-deferred, and Roth. Why: two people with $1M have very different spending power depending on the split, because the IRS owns a slice of one of those buckets.
• I have an honest annual spending figure, built from the last 12 months rather than a guess. Why: every projection you will ever run is anchored to this number. A 15% error here outweighs any amount of investment fine-tuning.
• I have separated spending that stops in retirement from spending that starts. Why: commuting, payroll taxes, and saving stop; health premiums, travel, and time-to-spend-money start. They rarely cancel out neatly.
• I know whether my plan depends on part-time work, and what happens if that work isn't available. Why: "I'll consult a bit" is the single most common load-bearing assumption in early-retirement plans, and health or the market often removes it.

2. Withdrawal order

Which account you spend first is worth real money — often more than a percentage point of return, and entirely within your control.

• I have a default order for which accounts I draw down first, and I can say why. Why: the conventional taxable → tax-deferred → Roth order is a reasonable starting point, but it's a starting point, not an answer.
• I know the top of my likely tax bracket in a typical retirement year, in dollars. Why: you can't deliberately fill a bracket you haven't measured. This single number drives conversions, capital gains, and withdrawal blending.
• I have looked at whether the years between retiring and claiming Social Security are unusually low-income ones. Why: that window is often the cheapest tax space you will ever have, and it closes permanently once benefits and RMDs start.
• I have decided whether Roth conversions belong in my plan, even if the answer is no. Why: conversions are use-it-or-lose-it. Each low-income year you skip is bracket space that never comes back.
• I know where the first year of spending is physically coming from — which account, which holding. Why: "the portfolio" isn't an answer on the day you need cash. Knowing the specific source stops a forced sale at a bad price.

3. Tax exposure

Retirement doesn't end your tax return; it changes who withholds. The surprises are almost always about thresholds rather than rates.

• My retirement spending target is stated after tax, and I know the gross withdrawal that produces it. Why: withdrawal-rate rules of thumb are all pre-tax. Spending $60,000 from a traditional IRA can mean withdrawing $72,000 or more.
• I know how my state treats retirement income, and whether I plan to move. Why: state treatment of pensions, Social Security, and IRA withdrawals varies enormously, and a move can change your plan more than any market year.
• I understand that up to 85% of my Social Security benefit can be taxable, and roughly where my income sits against those thresholds. Why: crossing a provisional-income threshold can push your effective marginal rate well above your nominal bracket for a stretch of income.
• I have checked my income against the Medicare IRMAA surcharge thresholds, if I'm within two years of 65. Why: IRMAA is a cliff, not a slope. One dollar over a threshold raises premiums for a full year, and it looks back at your return from two years earlier.
• I know how I'll pay tax during the year — withholding from withdrawals, or quarterly estimates. Why: no employer is withholding for you anymore. Underpayment penalties are the most avoidable cost in the whole plan.
• I know the cost basis of my taxable holdings, or where to find it. Why: basis determines the tax on every sale, and it's far easier to reconstruct now than during a year when you need the cash.

4. The healthcare gap before Medicare

If you stop working before 65, you are buying your own health cover until Medicare starts. This is the item that most often moves a retirement date.

• I know exactly how many months sit between my retirement date and my 65th birthday — and my spouse's. Why: this is the length of the gap you have to fund. Couples often have two different gaps, and the longer one governs.
• I have priced a real marketplace plan for my age, state, and household — not a national average. Why: premiums vary by a factor of three across ages and states. An average figure is the one number guaranteed not to be yours.
• I have checked whether my planned income qualifies for a premium subsidy — and what happens if it doesn't. Why: subsidies phase out with income, so a large Roth conversion or capital gain can cost far more than its own tax bill.
• I have budgeted the out-of-pocket maximum, not just the premium. Why: a bad health year costs premium plus deductible plus co-insurance up to the cap. Plan for the cap at least once.
• I know whether COBRA, a spouse's plan, or retiree coverage bridges part of the gap, and for how long. Why: 18 months of COBRA can turn an unaffordable gap into a manageable one — but only if you time the start deliberately.
• I have a plan for Medicare enrolment timing, including Part B and any late-enrolment penalties. Why: Part B late-enrolment penalties are permanent, and the enrolment window is narrow and unforgiving.

5. Sequence-of-returns buffer

A bad market in your first decade does damage a good market later can't undo, because you sold shares to live on at the bottom. A buffer is how you avoid selling then.

• I hold at least one to three years of spending in cash or short-term bonds, separate from the growth portfolio. Why: it means a 30% drawdown in year two is something you wait out rather than something you sell into.
• I know what my portfolio would be worth after a 35% fall, in dollars, and I've said that number out loud. Why: percentages are abstract. The dollar figure is what you will actually react to, and reacting badly is the real risk.
• I have identified which spending I would cut first, and roughly how much that saves. Why: flexibility is what makes a higher withdrawal rate safe. Deciding the cuts in advance means you make them early, when they still work.
• My asset allocation is one I would keep through a bad year, and I've written down why. Why: the allocation you abandon in March is worse than a more conservative one you keep. Write the reason down while markets are calm.
• I have a rule for refilling the cash buffer — when, and from what. Why: a buffer with no refill rule quietly becomes a one-time cushion instead of a standing defence.
• I have run my plan against a poor first decade, not just an average one. Why: average returns are the case that never happens. The order of returns is what decides the outcome.

6. Social Security timing

Claiming age is one of the few irreversible decisions here, and the difference between the best and worst choice is often six figures over a long retirement.

• I have pulled my actual benefit estimate from ssa.gov rather than guessing. Why: the estimate depends on 35 years of indexed earnings. Nobody guesses their own number accurately, and errors in the record take time to fix.
• I know my full retirement age and what claiming at 62 versus 70 does to the monthly amount. Why: the spread is roughly 70% to 124% of the full benefit — the same decision, worth almost double at one end.
• If I'm married, we have decided the claiming order for both benefits together, not separately. Why: the higher earner's benefit becomes the survivor benefit. Delaying it is longevity insurance for whoever lives longer.
• I have checked whether I qualify on an ex-spouse's record, if I was married for ten years or more. Why: it's a real entitlement that costs them nothing and that a lot of people never think to check.
• I've considered how delaying interacts with my withdrawal plan and my tax brackets. Why: delaying means spending more from the portfolio first — which is often exactly the low-income window you want for conversions.

7. Required minimum distributions

At some point the IRS stops letting you defer. RMDs are predictable decades ahead, which makes them one of the easiest problems to shrink early.

• I know the age my RMDs begin and the calendar year that lands in. Why: the starting age has moved twice in recent years. Working from an out-of-date age throws off every conversion plan built on it.
• I have a rough estimate of my first RMD, based on my traditional balance growing until then. Why: a balance that doubles before RMDs start doubles the forced income — and can drag Social Security taxation and IRMAA along with it.
• I know that Roth IRAs have no lifetime RMDs, and I've factored that into which accounts I spend first. Why: it makes Roth the natural last bucket and the natural inheritance bucket, which changes the whole drawdown order.
• If I'm charitably inclined and near 70½, I know what a qualified charitable distribution is. Why: a QCD satisfies an RMD without the money ever landing in your taxable income — better than donating after withdrawing.
• I know which of my accounts have RMDs and whether they can be aggregated. Why: IRA RMDs can generally be taken from one IRA; 401(k) RMDs generally cannot be pooled. Getting this wrong triggers a penalty on a missed amount.

8. Estate basics

Not the exotic version — just the five documents and one form that decide what happens if you're unavailable, temporarily or permanently.

• Every retirement account and life insurance policy has a current named beneficiary, and a contingent one. Why: the beneficiary form beats the will. A stale form sends the account to whoever it names, regardless of what any other document says.
• I have a will, and it reflects my current family situation. Why: without one, the state's default rules decide — and they rarely match what anyone actually wanted.
• Someone I trust holds financial power of attorney, and someone holds healthcare power of attorney. Why: these matter while you're alive but incapacitated — the window where a family has the least power to act without them.
• I have an advance healthcare directive stating what treatment I do and don't want. Why: it takes an impossible decision away from the people who love you at the worst possible moment.
• One other person knows where the accounts, documents, and passwords are. Why: assets nobody knows about are functionally lost. A single sealed page listing where things live solves most of this.
• If I'm married, my spouse could run the finances alone starting tomorrow. Why: in most couples one person handles the money. The other one eventually has to, usually at the worst time.

What to do with the ones you couldn't tick

Count them. Fewer than five unticked and you are in good shape — book a Saturday and clear them. Between five and fifteen and you have a real project, so start with section 4 (healthcare) and section 6 (Social Security), because those two most often change the retirement date itself. More than fifteen and the useful move is to stop reading and build a projection: most of the remaining items are answers that fall out of a plan rather than things to research one at a time.

Three of these sections are hard to settle with arithmetic alone — withdrawal order, the sequence-of-returns buffer, and RMD growth all depend on how the years interact. Those are the ones worth modelling rather than estimating. We've written them up in more detail in which accounts to draw down first, sequence-of-returns risk, and RMD rules and deadlines.

Work through the harder items

• Which Accounts to Draw Down First — section 2, in full.
• When to Take Social Security — section 6, with the break-even maths.
• Sequence-of-Returns Risk — why section 5 exists.
• Retirement Drawdown Calculator — put a number on how long the money lasts.