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Move Over Spandex: 10 Resolutions Designed to Better Prepare You for Retirement

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If you're approaching retirement and looking for ways to be proactive around your finances before hitting the big day (the day your paycheck stops and the adventure begins), below is a list of action steps that you can take right now. Push the spandex and marathon aspirations to the side for a minute. New Year's resolutions shouldn't just be about physical fitness. These steps can help your financial fitness and set the stage for a long and more secure retirement.

1. Retirement Budget.

Chances are if you don't keep a budget during your working years, you will struggle to do it in retirement. Since poor money management risks are greater in retirement (i.e., you have no paycheck), it is really important that you kick this bad habit now. Something as simple as developing a spreadsheet that tracks all of your assets, income and expenses that you periodically update is a great start. Using software like Quicken or joining Mint can be even better.

2. Review Your Portfolio Allocation.

You spent a lifetime hearing about "asset allocation" when it came to managing and diversifying your retirement savings accounts. But when the paycheck is gone, it's important to focus on your entire portfolio of assets earmarked to fund retirement. This includes things like the equity in your house, real estate, CDs, bonds, annuities and retirement accounts. You need to consider balancing your need for both safety and growth, as well as future liquidity needs.

3. Retirement Income (a.k.a. Retirement Paycheck).

Even though the paychecks stop, the bills keep coming. As you transition into retirement, it's important to understand your core fixed living expenses and how much money you will need to fund them. Many Americans try to have enough guaranteed income sources in place during retirement to fund these basic needs. Such sources include Social Security, annuities and defined benefit pension payment. If you have access to a 401(k) or 403(b) plan, you should investigate the specific income options available in those plans as you approach retirement.

4. Social Security.

There are a number of surprising choices when it comes to managing your future Social Security benefits. Having a spouse adds more flexibility and consequence to these decisions, especially if you both work. So does the age at which you start payment. A good or bad decision will follow you through retirement. You can estimate monthly income payments at the SSA website.

5. Medicare.

It is likely that transitioning to Medicare will have a material impact on your health care benefits. Important things like the medications you take or the doctors you see could all be impacted. You may also need to investigate supplemental coverage, which can add significant complexity to the equation. Researching prior to retirement can make the decision easier when the time comes.

6. Income Taxes.

Your paycheck is gone. It's very possible this will affect your income taxes (hopefully in a positive way). Things like the deductions you take, credits available, the value of carrying debt and the particular assets that you own.

7. Required Minimum Distributions (RMDs).

When you hit 70 and a half, the required minimum distribution rules kick in for certain retirement accounts and the tax code begins to "force out" some of your retirement savings that have grown tax-deferred over your working years. There may be some flexibility here in terms of which accounts you take the distributions from, so know your options beforehand.

8.Legacy.

Make sure you have an updated will. In the absence of a will, or in the case where your will is unclear, you could be leaving a lot to chance. State law and/or a probate judge probably won't allocate things the way you would want. Review any beneficiary designations that you have in place on various accounts and remember beneficiary designations can override your will.

9. Shocks.

I like to break retirement savings into four buckets: 1. Basic Needs, 2. Fun Money, 3. Shock Protection, and 4. Legacy. Shock protection is the financial cushion to protect you against the unexpected. Things like inflation, market downturns, longevity and major medical events can have a devastating impact on your retirement security. It's important to understand just how much they could impact or interrupt your ability to maintain your standard of living during retirement and plan for it.

10. Financial Professional.

Last but not least, contact a qualified financial professional. He or she can help you work through virtually every item listed above, including helping you assess your current situation, and positioning you for a safe and more secure retirement. If you are nearing retirement, it's no longer about what you shoulda, coulda or woulda done. It's now about how to best position yourself for the next 30 years. It's about developing a plan that enables you to pay the bills, work through your bucket list and be protected from the unexpected. And if there is something left when the road ends, to leave a legacy for family, friends or charity.