It’s easy to put off financial retirement planning when you’re young. There seem to be more pressing priorities in our earlier decades than setting aside money for our golden years, because many of us are focused on life goals like landing a dream job, buying a home, raising a family, or traveling the world.

However, retirement planning is more important now than it’s ever been. People in their 60s are expected to live at least through their mid-80s, so those leaving the workforce need to have a financial net that will keep them secure for another few decades. Plus, our cost of living tends to increase in our senior years because of our increased healthcare needs: the average couple in their mid-60s is estimated to need over $600,000 to cover their continuing medical costs alone.

It’s easy to see why the earlier we start retirement planning, the better. However, there is still a lot seniors can do to secure their finances and ensure a high quality of life no matter what the future brings.

Find a Financial Planning Team

If you don’t already have one, assembling a financial planning team should be the first step in your financial retirement planning. Your financial management team should include a financial planner (also called a financial advisor or FA), a tax account, and an attorney. Each member of your retirement squad will help you with one or more of the steps listed in this guide.

Financial Planner

Many banks offer FAs to their clients at free or discounted rates. These specialists will help you learn what kinds of accounts you should open, including savings accounts, stock or mutual fund accounts, trusts, certificates of deposit (CDs), and bonds. Likewise, they’ll help you decide which accounts you can get rid of that are no longer serving you well, such as those with high maintenance fees or that have low or negative returns on investment (ROIs). They’ll also advise you on how best to allocate your funds to make your money grow.

Tax Accountant

Although many people see hiring one as a needless investment, working with a certified public accountant (CPA) can save you money that will become increasingly important with age. They’ll help you find deductions you may not be aware of when your returns are filed, and they’ll help you strategize on your investments to help you get the highest returns possible in the future.

Attorney

Some attorneys will help you with financial planning, while others will provide the important service of protecting your financial health now and that of your loved ones after you pass away. They’ll also help you prepare the critical documents protecting your assets and financial decisions.

Create a Budget for Life in Retirement

It’s important to have a clear picture of what your monthly income will be in retirement so you know what you can afford to spend on living expenses each month. To create a budget, look at the values of your existing financial accounts (the cash in your checking and savings accounts, for example), calculate how much you’ll bring in each month in retirement, and review your employee benefits and your assets. From there, work with your financial planner to see what kinds of accounts may be worth opening and where you should move your money, especially if you’re uncomfortable with your projected budget.

Calculate Your Retirement Income

Work with your FA to pin down how you’ll bring in money once your paychecks stop rolling in. Your retirement income may come from a variety of sources, including:

  • Social Security
  • Employee benefits
  • Savings accounts
  • Passive income sources, such as investment account dividends and rental property

Be sure you work with your accountant to understand how taxes will affect all of these sources of income. The difference between your gross earnings and your net income can be huge, so it’s important you have the right figures when determining your budget.

Evaluate Your Employee Benefits

Take a look at all of the benefits you got from your employer that may help supplement your finances in retirement. These perks may include:

If you’re still working, see what benefits you can take advantage of before retirement. Many companies offer employer-matched contributions on 401(k)s and IRAs, which is free money all employees should take full advantage of.

Know the Value of Your Assets

In addition to your checking, savings, and retirement accounts, what you own also has value that may play a role in your financial future, particularly if you sell them to pull in some extra money. Work with your FA to determine the worth of these assets:

  • Real estate you own, including your primary residence and investment property
  • Vehicles
  • Miscellaneous assets, such as jewelry and valuable collectibles like artwork
  • Life insurance policies, many of which can be sold for cash (known as a life settlement) or be used as liquid funds while the holder is still living

Tally Up Your Monthly Expenses

Once you know what your monthly income will be, take a look at what you expect your ongoing expenses to be. Keep in mind your monthly spending may look completely different in retirement than it does now, even if you don’t plan on moving. For example, many people dream of traveling after they retire, so including the cost of regular trips will be important in creating an accurate budget.

Expenses you’ll need to factor into your budget include:

  • Home expenses, whether you rent or own your property, including monthly mortgage or rent payments, utilities, and maintenance and upkeep
  • Everyday transportation
  • Grocery, gas, phone, and entertainment
  • Insurance premiums, including home and auto insurance, life insurance, and burial or funeral insurance
  • Healthcare and medical expenses, including Medicare, Medicare Advantage, and Medigap plans
  • Travel and vacation

Calculate Your Budget

When you have your cash-flow numbers, you’ll see how much money you’ll need each month to live comfortably. If your monthly bills are higher than your retirement income, you can take action to lower your costs or increase your revenue.

Plan for Unexpected Costs

Life can be unpredictable, so it’s just as important to have emergency savings in retirement as it was in your younger years. Unforeseen expenses you may face in retirement include:

  • Health issues, such as an unexpected illness, surgery, or emergency room visit
  • Moving into an assisted living facility or a retirement home
  • Hiring a live-in caregiver
  • Emergency repairs to your home or vehicle
  • Unplanned trips for a family emergency or an unexpected death
  • Death of a spouse or another dependant

While you don’t need to factor in an extra $5,000 a month to pay for a roof replacement or an overnight hospital stay, you do need to have a reliable way to pay for unplanned expenses, and making a monthly budget with no room for error could cause trouble in the long run.

Downsize if Needed

If you’re going to be bringing in significantly less money in retirement than while you were employed and your retirement budget won’t accommodate your current lifestyle, you may need to make some adjustments to your current way of living. Ask yourself what steps you can take to downsize certain parts of your life:

  • Can you move into a smaller home?
    • You’ll save money not just on your mortgage or rent, but also utility and maintenance costs that come with having a larger home. However, be mindful of moving expenses, including the cost of movers, transportation, and boxes and other packing materials. This amount can be significant, depending on how far you’re traveling and the cost of living where you reside now and where you’re moving.
  • Can you pare down to one or even no cars?
    • You’ll instantly save on gas, maintenance, and insurance costs. Depending on how often you use your vehicle and the type of area you live in, it actually may be more financially sound to rely on public transportation or services like Lyft and Uber to get around.

Update Your Legal Documents and Financial Accounts

Updating your legal documents and financial accounts will help protect your finances in retirement as well as the beneficiaries of your estate after you pass away. Your attorney can help guide you in taking care of these important actions:

  • Finalizing your will; make sure at least one other person (such as your spouse, child, or attorney) has an understanding of what the will contains and where it is kept
  • Adding co-owners to your financial accounts; if you’re unable to access your funds, someone else should be able to, especially if they need to on your behalf. Should you pass away, others listed as owners on your accounts will be able to continue using the funds, which is helpful when paying for a funeral and settling the estate. If you’re the only owner, your financial account will be frozen upon notification of your death until all of the necessary paperwork is received, which can be a burden for loved ones.
  • Updating the beneficiaries on your financial accounts; these will be covered in your will, but adding them to each individual account adds an extra layer of ease for your loved ones
  • Drafting powers of attorney for your financial accounts, healthcare needs and medical decisions, and contract agreement

Copies of all of these documents and records should be left with a trusted third party, like your lawyer. Copies stored in the home can become lost, damaged, or even stolen. Plus, giving them to one person means that everything you’ll need to reference in retirement is in one place. It also gives your heirs a single point of contact for tracking down the paperwork they need to make important financial and care decisions on your behalf.

Financial retirement planning is ideally done over the course of a lifetime, but some people find themselves on the brink of retirement without a solid strategy in place. It may feel overwhelming or even hopeless, but putting a financial retirement planning team together is the first step in securing your future. From there, you’ll be able to accurately assess what funds will come and go each month, adjust your lifestyle as necessary, and take steps to protect your finances now and throughout your golden years.