Tips for staying on track in the retirement planning process.
Retirement planning is hard for procrastinators. I should know, I am one. As I think about deadlines (to finish this column or other writing projects, for example), I sometimes get anxious. That’s because I often wait until the 11th hour before I put pen to paper or fingers to keyboard to actually do the work that needs to get done.
If you’re wondering if you’re a procrastinator when it comes to retirement planning, think about the last time you did the following:
- Reviewed your health insurance options during the annual health benefits open season.
- Reevaluated your life insurance to increase or decrease your coverage as needed.
- Discussed a plan for long-term care with your loved ones and thinking about how you would want to be cared for should the need arise.
- Reviewed your official personnel folder to be sure your service history is accurately documented.
- Requested a retirement estimate from your human resources office if you are within five years of retirement eligibility.
- Updated your beneficiary designations when you experience a life event.
- Rebalanced your Thrift Savings Plan as you get closer to retirement (unless you are automatically doing this using the L Funds).
- Reviewed your latest Social Security statement using your online account or mailing in a request using form SSA 7004.
Procrastinating on these important tasks can be costly as you approach retirement and attempt to maintain your retirement planning goals. In a 2013 Psychology Today blog post, Kevin Gyoerkoe wrote about four ways to avoid being a procrastinator:
Get motivated. “You'll need to feel confident that you have the ability to change, that you're ready to take this step, and—perhaps most of all—that this change is important to you.” This may require getting educated. Attending a pre-retirement or mid-career planning seminar is a good place to start.
Learn to set good goals. Even if you’ve gotten a late start on the retirement planning process, you can come up with a plan that includes appropriate and effective goals. For example, you could decide that every fifth birthday starting at age 45, you will request a Social Security statement.
Manage your time. During the upcoming Federal Employees Health Benefits Program open season, for example, it might be too much for you to sit down and review your health insurance plan, select a dental or vision supplement and set up your 2019 flexible spending account in one sitting. Instead, try this approach:
- Set aside an hour this weekend to review your 2018 out of pocket medical expenses.
- On Nov. 12 (the first day of open season), compare your health plan to two or three new choices.
- On Nov. 17, take time to look at the plan premiums, deductibles, coinsurance and copayments for each of the plans in your short list of possible choices for 2019.
- On Nov. 24, review the dental and vision coverage of the health plan you selected for 2019 to determine if you need a dental or vision supplement.
- On Dec. 1, if you are a current employee, set up your flexible spending account for 2019. Set aside tax-free dollars from your paycheck to pay for your out of pocket health care and dependent care expenses.
- On Dec. 10 (the last day of open season), relax and know you’ve taken the time to ensure you’ve made the best choice.
Change your thinking. Many people I meet simply do not enjoy doing what it takes to plan for their future. The idea of reviewing the TSP or filling out a beneficiary form has a negative connotation. Combat those negative thoughts with positive action. Remind yourself that the task will not take that long, especially if you break it down into simpler steps.
Also, remember that the greatest inspiration is a deadline. And most tasks aren’t as hard as you think they’ll be once you get started.