Many people make the mistake of not planning for retirement until just before they want or need to retire.  The immediate satisfaction of planning a vacation from work in the present often trumps making actual retirement plans.  Whether you are pressed for time in figuring out how remain financially stable and make the most of your retirement or you have a little more time to sort it all out, here are some things to think about during the planning process:

Income and Expenses

Figure out what your monthly “income” will be in retirement, whether this comes in the form of a pension or a sum of money you will be allotting to yourself from previous investments, and compare it to your income and expenses today.  A good way to test if you will be able to maintain your current lifestyle, or if you’ll have to cutback on spending, is to try to live on your “retirement income” for a few months.

Taxes and other Expenditures

If not properly dealt with, one of your biggest retirement expenses could end up being taxes.  Make sure you put “find a way to reduce taxes” on your planning for retirement to-do list.  One way to do this is converting retirement accounts to Roth IRAs, which are tax-free.  If you do this correctly over a span of time (five years or so), you could save yourself a good amount of money.

Another tax that often creeps up on retirees is property tax.  Make sure that your retirement income is enough to cover your property tax.  If you realize early that this may be a problem, you leave yourself time to figure out a Plan B.  Also, don’t forget that sometimes relocation, while not always ideal, may be the best option when it comes to paying property tax in retirement.

It may sound obvious, but don’t forget to think about healthcare costs, especially if you will be under 70 and not eligible for Medicare.  Look for health insurance through an employer or private insurer.  Much like every other facet of planning for retirement, the key is preparation.  Health insurance is important at any age, but perhaps even more so in retirement.

Be Smart About Social Security

Put some thought into when you will choose to start accepting Social Security.  Many people believe that taking Social Security at a later age will ultimately maximize the payout.  While this may be true, it does not necessarily result in a better quality of life.  Yes, you can take your Social Security payout at 80, but will that money be more useful to you at a younger age?  Retirement is about finally having time to do all of the things you enjoy and, as long as you have done some financial planning, money from Social Security can help you enjoy those activities.  Think less about maximizing the Social Security payout and more about maximizing your overall experience in retirement.