Filbrandt Reports

Your Retirement Readiness Checklist: Have You Completed These 12 Points?

Volume 18, Issue 5

Executive Summary:

In this report, you will learn the following about how ready you are for retirement:

  • Failure to address the items found on this checklist could lead to negative financial and lifestyle surprises once you are officially retired
  • For a variety of reasons, many professors don’t make retirement preparation a priority
  • Planning for your retirement should begin at least three years before the actual date
  • How your Social Security benefits are calculated
  • The effects of claiming Social Security before or later than age 66

University professionals experience many milestones over their careers in a university setting, and retirement is one of them. Unlike most other career steps, professors would rather focus on their teaching, research or personal interests than the steps necessary to be ready for retirement. Therefore, when retirement time arrives, many in academia have unanswered questions about what they need to do to be ready.

Retirement can be very enjoyable, but it can also be confusing and stressful for someone in an academic environment who has not planned for retirement-related changes, such as the need to create a reliable, tax-efficient income stream from their investment portfolio.

Over the years, Filbrandt & Company has learned in working with clients in a university setting that when it comes to financial planning issues, no one wants to make a big mistake. If you are not properly prepared for retirement, a big mistake you could have avoided can negatively impact you and your loved ones. You should begin to address the items in the list when you are within three years of your anticipated retirement date.

1. Determine your monthly budget and retirement income plan

The first step in your planning process is to evaluate your current expenses. Then, you will need to determine how you will structure a reliable income stream in a tax-efficient manner to support your budget. How to start this process is often one of the first questions our new clients have.

Factors to consider in comprehensive retirement income planning include deferred income taxes on retirement savings, Social Security, health care costs (including possible long-term care), and creating “tax balance” across the various types of assets you have.

These include your university retirement accounts and investments outside the university. This will help you determine your own after-tax monthly income, after which you can then create a budget factoring in all of your expenses.

If you are uncertain about any of these items, or if you have not completed a detailed retirement income plan, it is time to contact a comprehensive financial planner.

2. Determine your eligibility and monthly payment from Social Security

One key aspect to any retirement income plan is Social Security. Visit the Social Security Administration’s quick calculator at to receive an estimate of your monthly benefit in retirement. (If you haven’t already set up an account there, we highly recommend that you do so immediately.)

Keep in mind that you won’t receive 100 percent of your eligible monthly benefit unless you wait until your “full retirement date,” which is age 66 plus additional months for most people. If you wait until after your full retirement date, you’ll receive a monthly benefit more than your 100 percent full retirement date benefit amount. But don’t wait past age 70. A good financial adviser will run a Social Security analysis for you so you have a clear picture of what you can expect over time.

3. Ease out of stocks

Earlier in your career lifecycle, stocks were attractive due to their potential for growth. Now as you approach retirement, over-exposure to stock risk creates possible headaches that you don’t need.

Remember what happened to the stock market in 2008 and 2009? Less than 18 months after hitting an all-time high in October of 2007, the Dow Jones Industrial Average dropped more than 50 percent of its value in the wake of the housing market price collapse. Stocks have risk and volatility, and at this point of your life, less risk means less worry. You don’t want to be in a position where your retirement can be affected if the markets go through a major correction. Your financial adviser will provide you with recommendations on investment vehicles that have less risk.

4. Have more cash on hand

Once you retire, you won’t be receiving a guaranteed income in the form of paychecks any longer.

By following the steps in this report, you will have a retirement budget established. But budgets can’t account for unexpected expenses. Common expenses for people around retirement age involve health issues and extra travel.

If you haven’t already done so, create a savings, money-market or similar low-risk account that will cover one year of your anticipated expenses. Some of this may come from selling out of some of your stock holdings as mentioned in step 3.

Your Retirement Readiness Checklist: Have You Completed These 12 Points?

5. Review your will and estate plan

We often find when we take on new clients that they either don’t have an estate plan, or don’t understand how their current estate plan will be executed.

If you have not reviewed these documents for several years, it is of utmost importance for you to do so. You may not be aware that there are situations in which terms of a will can be superseded in the estate process.

If you don’t have a will, power of attorney or a trust, we can’t say strongly enough that this stage of your life is the time to have one created.

6. Beware of the rollover trap

During the pre-retirement time frame, you will almost certainly be approached by someone who will tell you it’s time to roll over your university retirement savings accounts to an IRA.

This may not be the best idea for university professionals. In short, you are not required to roll over your retirement accounts, and the university plans offer several advantages over other retirement plan structures:

  • When you roll retirement savings outside of the university, you can lose access to some unique products that can have great benefits.
  • The university has negotiated low fees with the vendors that they have: TIAA, Fidelity, Vanguard and others. You want to keep taking advantage of that. Generally speaking, fees will be higher for accounts outside the university environment.
  • The IRS considers a retirement plan as a safe haven from creditors. IRAs, in some cases, are not.

Be aware that you should not agree to a rollover without reviewing your options. It is unnecessary to have all of your assets in one account. The key is to manage all investment assets as one unit, like Filbrandt & Company does with our unified portfolio service. Also, be aware that people trying to sell you on the rollover idea may be motivated by their compensation structure.

7. Review your health and life insurance needs

When you leave the university, you will likely lose both of those benefits. You do have the option to inquire with the benefits office about the cost to have one or both of your insurance programs renewed through the university. If you retire before age 65, you’ll need some alternate health insurance coverage until you are eligible for Medicare. The first chance you’ll have to enroll in Medicare is your Initial Enrollment Period (IEP), which is three months prior to your 65th birthday.

8. Confirm retirement procedures

This will likely be a checklist in and of itself, and it will come from the university human resources office. It will include who needs to be notified (most likely, your chair or dean), in what form and by what date. It will also include items that are university property (parking passes, etc.) that will need to be returned prior to your last day of work.

Your Retirement Readiness Checklist: Have You Completed These 12 Points?

9. Consider a “phased” retirement

People who retire from a career they have happily worked in for many years often feel a sense of loss at retirement, and professors are no exception. Some universities offer a “phased retirement,” a period of two or three years during which the number of hours the professor works gradually diminish.

This gives the professor a chance to experience a less-structured work schedule over time, which often makes the transition to retirement easier.

10. Contact former employers to learn if you may be eligible for retirement benefits

Many universities are no longer on the pension system. If you previously worked for one that had a pension while you worked there and has subsequently phased it out, you might be eligible for some form of payment.

Similarly, you may also be eligible for benefits from health insurance you had with a previous employer. Contact the benefits office at that university and inquire about pension or insurance benefits.

​11. Make sure your address is correct with the human resources and payroll offices

There will be plenty of mailed notices as part of this process. This also ensures that you will receive your W-2 form the year after you officially retire.

Your Retirement Readiness Checklist: Have You Completed These 12 Points?

12. Apply for Emeritus/Emerita status.

This title brings with it privileges such as memberships, discounts, continuation of on-campus office space, parking and correspondence addresses, and continued engagement in intellectual and educational activities and groups.

It’s different at each university, so don’t assume it’s automatic that you’ll be granted Emeritus/Emerita status. Learn what’s required so you don’t miss out.

Plan for Your Future

While reading this report, you may have had an “a-ha” moment — realizing that overlooking one or more of these steps could adversely impact your family and yourself upon retirement.

To ensure you are ready for retirement, and to identify and review your unique situation as it relates to retirement planning, investment planning and estate planning, please contact us. Call us at 800-431-9740, or visit our website at Once there, click the contact tab to schedule a no-obligation appointment to speak with one of Filbrandt & Company’s retirement planning specialists.

Volume 18 Issue 5

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