Make These 3 Moves the Month Before You Retire

When you’ve worked hard all of your life, retirement is a milestone to truly celebrate. And if that milestone is now a mere month away, you may be growing increasingly excited by the day.

But it’s important to start off retirement on the right financial foot. So to that end, make a point to tackle these moves if you’re about a month out.

A person at a desk taking notes.

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1. Check up on your emergency savings

It’s a good idea for retirees to have a large amount of cash reserves on hand. The logic is that you wouldn’t want to have to tap your investment portfolio at a time that the market’s down and potentially lock in losses. So it’s important to have cash you can access for bill-paying purposes.

Now if you’re working, the general convention is to build an emergency fund with enough money to cover three to six months of bills. That sum could get you through a period of unemployment.

Retirement, on the other hand, may be more like a permanent period of unemployment. So it’s important to have even more cash reserves on hand in case you need to leave your investment portfolio untapped for months on end.

At a minimum, aim for a year’s worth of cash savings prior to retirement. For better protection against market swings that don’t work out in your favor, aim for two years’ worth.

If you don’t have enough cash set aside, take action now. Shift some assets around so you have the protection you need.

2. Find out what exit payment you may be entitled to from your employer

You may be entitled to some sort of payout on the part of your employer in conjunction with your retirement. Now’s the time to find out what sum you’re entitled to so you can make the most of it — or avoid the trap of assuming you’ll get a large payout when you’re really only entitled to a small one.

If you have accrued vacation time you never took, for example, you may be eligible to be compensated for it upon your departure. Talk to your benefits or payroll department so you know exactly what to expect.

3. See if you’re able to access your long-term savings penalty-free

Ideally, you’ve been saving independently for retirement in a 401(k) or IRA, or another long-term savings plan. Depending on your retirement age, you may or may not be able to access that money penalty-free, so it’s important to find out.

If you have funds in an IRA or 401(k), you usually have to wait until age 59 1/2 to avoid an early withdrawal penalty. But there can be an exception for 401(k) holders.

If you’re retiring during the calendar year you’ve turned or are turning 55 or later, you can generally take withdrawals from your most recent employer’s 401(k) without a penalty. However, that rule doesn’t apply to money you might have in a separate retirement plan, like an IRA you’ve been managing yourself on the side.

You may almost be at the point where you’re counting down the hours, not days, until retirement arrives. But make these moves when you’re a month out so you can start off in a good place, financially speaking.

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