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Smart Retirement Planning: A January Checklist

January is a great time to get started on your retirement planning. You're already starting to gather the financial information you need to prepare your income tax returns, and you'll be able to use much of the same information to help you plan for retirement.

Your first step is to set up a series of folders -- paper and/or electronic -- that will hold all the important documents and information that you need.

Just what information should you collect and organize? Here's a list to help you get started:

  • You'll want all the periodic statements for your IRAs, 401ks, and any other retirement saving account. If you no longer receive paper statements, create a virtual folder or document to keep all the links. I'd also print a paper version for your files, at least annually.
  • If you have a vested right to a pension under a defined benefit plan from a former employer, get a statement of your earned benefits. This should include the amount of monthly income you'll be receiving, when you're eligible to start your benefits, how to start benefits, and where you can get additional information. It might be years before you collect this pension, so you'll want to know how to start your benefits.
  • Collect all the booklets that describe your retirement plans, 401k plans, and retiree medical plans. The technical name for these booklets is Summary Plan Descriptions, or SPDs for short. If you never received paper versions of these, then again put the links into a virtual folder.
  • If there are any special letters or communications from your employer regarding your pension, retiree medical plan, or 401k plan, put them in the appropriate folder.
  • Gather the statements you've received from Social Security regarding your impending benefits. These statements are usually mailed to you about three months before your birthday each year.
  • Collect any records that apply to chronic medical conditions you may have. It's possible that many years after you were first diagnosed or treated, your doctor may want to know details about your medical history, medications you've taken, or the results of screening tests.
  • Many people have more wealth in their home equity than in their 401k plans. Put the appropriate real estate documents in one place, including such paperwork as the deed, loan documents, and property tax statements.
  • If you have any whole life insurance that builds cash values, get your hands on the policy documents and statements that show these values and the face amount of the death benefit.
  • If you have any term insurance that doesn't build cash values, collect the policy documents and find out if and when your premiums will increase. Many policies have level premiums for a specified period; when the period expires, you could be facing significant premium increases.
  • If you've purchased long-term care insurance, make sure you have the policy document and any sales literature you were given when you bought the policy.
  • Keep any sales literature about any investments or insurance products that interest you, or that may be useful for your retirement. How many times have you thought "I heard somewhere about an interesting product. Now what was it exactly?"
  • Finally, keep copies of articles on any aspect of retirement that pique your interest, including housing, health, lifestyle, investment, or insurance products.
One word of advice: You might be tempted to read these items while you're in the process of collecting them. If this bogs you down, resist this temptation and simply focus on collecting all these documents and organizing them in one place. Once you're organized, then you can go back and study this information more carefully.

Take a few small steps each week, and you'll make significant retirement planning progress throughout the year!

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