Is Retirement in View? If So, Here's Your Retirement To-Do List

03/05/2015 04:58 pm ET | Updated May 05, 2015

Retirement may seem like a distant notion, even for those inching toward this major milestone. The daily grind of errands, work commitments, meetings, commutes, household chores, etc. can make retirement seem far away... even when in reality it isn't. Before you know it, decades of working, planning and saving finally transform into a time of freedom, flexibility and slowing down.

To make sure you are staying on the path to retirement readiness amid the hustle and bustle of everyday life, here is a to-do list for those who are planning on retiring in the next five to ten years. By preparing now, you can ensure that you'll spend your retirement experiencing financial stability and success, rather than looking back with regret.

Write down your retirement budget. It's easy to daydream about retirement, picturing exotic adventures in foreign lands or leisurely days enjoying your favorite hobbies. All of the "bucket list" items you do not have time to explore during your working years come into clearer focus as retirement approaches. As you think about these upcoming fun times, don't forget that there will still be day-to-day expenses and monthly bills to contend with in retirement.

In order to make sure you are prepared to tackle these costs, take the time now to develop an up-to-date financial plan that tracks your income and expenses. A 2014 Voya Financial study found that only one-third of workers and retirees have a written budget. Recent retirees often have to tighten their purse strings after realizing their retirement budget does not match the budget they were used to during their working years. This can be a painful adjustment that requires significant changes not only to your spending habits, but also to your lifestyle expectations. It's better to run the numbers now to avoid surprises later.

Start by writing down your current and expected retirement budget. If there's a possible shortfall in retirement, you have time to adjust and shift your plan by putting more into retirement savings or pushing back your retirement date.

Think ahead about your housing. Start considering where you want to live during your retirement now. Are you planning to relocate, downsize or stay put? Your retirement budget can look vastly different depending on the answer to that question.

Estimate expenses for various housing options, factoring in costs such as property taxes, closing and/or moving fees, daily living needs, mortgage or rent payments, condo fees and home upgrades or maintenance.

If you have a partner, talk about - and agree on - a plan of attack for where you'll live once you retire. If you think you want to move to a new location, spend time there (in all the different seasons!) before you commit. A plan can seem good from afar or as a daydream sitting at your desk, but it's important to be sure you also experience the reality of it before committing to any big decisions.

Look at your investment portfolio to find the right mix of growth and income. During your working years, growth investments (such as stocks) may feel more appropriate for your portfolio. But, with only a few years to go until retirement, you may be inclined to shift investments toward more conservative choices (such as bonds, fixed income or treasuries).

Don't forget that growth investments do still have a place in your portfolio. An overly conservative allocation squeezes out growth opportunities that keep pace with inflation. Your money still has the potential to grow and work for you throughout your retirement; don't risk missing out on great opportunities by being too cautious. Instead, be sure you are healthily diversified in order to take advantage of market trends, while also hedging yourself against major volatility or market declines.

A smart way to look at your investment allocations is to segment assets for different time horizons. More aggressive investments fund longer-term goals (5+ years away from retirement), moderate investments help with mid-term goals (3-5 years from retirement) and conservative investments fund short-term needs (less than 3 years from retirement).

Your money should keep working for you in retirement. With a diverse set of income investments (annuities, ETFs, bonds, income mutual funds, etc.), you could potentially have a reliable stream of income during these later years.

Investigate your tax situation today to determine how it may change in retirement. Withdrawals from retirement savings in a 401(k) or traditional IRA will be subject to tax during retirement, potentially throwing you for a loop if you do not factor this in when mapping out your retirement income.

To counter this, consider saving in a Roth vehicle and/or converting some of your pre-tax savings into a Roth 401(k) or Roth IRA now - before you retire. Taxes will need to be paid when you initially convert, but future earnings won't be taxed when withdrawn. This ensures that you will not have that tax hit down the road when you are living on a fixed income and may not be expecting it.

Another option is to do a series of yearly Roth conversions, spreading out the tax impact. Roth conversions are complicated, though, so discuss potential tax implications with your tax adviser before transferring assets.

Get a game plan for your wheels in retirement. When living on a fixed income in retirement, retirees may get thrown for a loop by car purchases, which can be an unexpected and large expense.

It's best to avoid car loans if possible, especially as you enter retirement and seek to minimize extra costs. If this is not possible, try to keep payments within reason so they do not negatively impact your retirement cash flow.

If your current vehicle's days are numbered, it may be best to make a purchase before you retire, while your income is higher.

Figure out a plan (and costs) for your health insurance. Retirement is likely to bring change to your medical insurance policies. Plus, if you are under 65, you will not quality for Medicare. Find out whether there are any group health benefits you receive through your employer that you can carry over into retirement.

It's not easy to untangle this web, but sit down (ideally with a financial adviser) and study the health policies you currently have in addition to your future Medicare options. Based on plan options, try to estimate out-of-pocket expenses in retirement based on your health status and pre-existing conditions.

Make a plan for how you spend your time. How are you going to fill up your retirement calendar? What activities are going to keep you active, engaged, socializing and busy? Think about your plan for how you will spend your time now. Talk about it with your spouse or partner so you are on the same page. Shifting from a work to leisure schedule can take some getting used to, so start thinking about what you want to do so your retirement years live up to your expectations!

These retirement to-dos can help you feel more confident and in control of your future, only adding to the excitement and anticipation that comes as you prepare for this big day.

Voya Retirement Coach Jacob Gold is a third generation financial advisor with Voya Financial Advisors, Inc., a broker-dealer of Voya Financial®. He is a published author of "Financial Intelligence; Getting Back to Basics after an Economic Meltdown", which was published in August 2009. Gold is a CERTIFIED FINANCIAL PLANNER™ practitioner and Series 7, 24 and 66 securities registered.

8 Ways To Prepare For Retirement