Are you ready to retire? How do you know if you’re ready? How do you get ready?

Now that you’re getting closer to retirement, you've got questions—and we've got answers. Following these five steps can help you get closer to achieving retirement balance.

Picture your retirement

Knowing how you want to spend your time can help you figure out your retirement expenses.

Ask yourself:

• When do you want to retire? 
• How does your retirement date affect your savings and spending?  
• What will you do in your free time?
• Will you get a part-time job or start a second career?
• Where will you live?

With this picture in mind, you can then use the retirement planner¹ at myplan.johnhancock.com or John Hancock’s retirement app to:

• Learn just how much money you may need for retirement
• See how your projected retirement expenses and income change over time
• Personalize and refine your projections for more accurate results
• Receive your retirement action plan to help you get or stay on track

To use the retirement planner, simply sign in to your retirement account and choose Let’s go on the homepage. 

Look at your health insurance options

Before you leave your job, find out about options for health insurance—what’s offered through your company and what’s available through independent medical plans, Medicare, and Medicaid. Ask about monthly costs, deductibles, and limits, as well as the coverage for wellness visits, specialist visits, medications, and treatments.

Put together a budget

Some of your costs will stay the same, but some will be different. You’ll see in the retirement planner that when you retire, your spending is generally higher in the beginning—as you travel, eat out, and are generally active. Your spending then slows down for a bit, then goes up again, driven by healthcare expenses. Use the annual spending estimates in the retirement planner to help guide your budgeting—and this worksheet to help keep track of it all.

Pay down your debt

Consider paying down your debt to help free up cash in retirement, including:

• Mortgages
• Car loans
• Credit cards
• Student loans

So where does the money commonly come from to pay for your retirement? Most people rely on several different sources.

If there’s a difference between what you’re projected to have and what you’re projected to need, you’ll want to create a plan to help close the gap.

Consider small changes to help boost your savings

Review your contribution rate: If your retirement plan allows you to contribute, use the retirement planner to explore how different savings rates could help bring you closer to your savings goal. Even an increase as small as 1% can have a positive effect on your savings over time. And if you’re age 50 or older, you can contribute an additional $7,500 this year, for a total of $30,500 in 2024.   

Adjust your spending: Check your budget to see if there are any expenses you can reduce or eliminate. For example, could you buy coffee three days a week instead of five? You can put any money you save toward your retirement.

Think about your investment strategy

The more your investments earn, the less money you might need to save for retirement, so make sure your investments are working for you. Consider putting some of your retirement savings in investments that have the potential to grow. How much you put in will depend on many things, including when you plan to retire. If you’re close to retiring, making your money last might be more important. Take the risk quiz to find out what kind of investor you are. The results can help you choose a mix of investments that balances potential risk and reward, helping you reach your goals.

These examples are for illustrative purposes only and are not indicative of any particular investment. There is no guarantee that any investment strategy will achieve its objectives. Neither asset allocation nor diversification guarantees a profit or protects against a loss. An asset allocation investment option may not be appropriate for all participants, particularly those interested in directing their own investments

Understand the options for your retirement account 

When you leave your employer, you generally have four choices for the money in your retirement plan. Before drawing down your savings to provide income in retirement, you should first carefully review these options and choose the one that best fits your needs.² 

If you’d like help evaluating these options, call 888-695-4472 to speak with a John Hancock retirement consultant.³

Create a withdrawal—or drawdown—strategy

Your retirement could potentially last more than 30 years. Creating a drawdown strategy to manage how and when you’ll access your savings can help ensure your long-term financial well-being. Here are four common methods that help balance your need for income with the need to make your money last throughout your retirement.  

Factor in RMDs

Whichever strategy you choose, make sure it includes your RMDs—the amount you generally have to take out of your retirement account every year once you reach the age listed below.  

Know what’s taxable and what’s not

The money you take out of your retirement account may be taxable, depending on the type of account you have.  

Traditional 401(k) and IRA savings and earnings are generally taxed on distribution.

Qualified Roth 401(k) and IRA withdrawals may be tax free.⁵

Because the rules can be a bit tricky, you may want to contact a financial professional or tax accountant for help. You can use this retirement tax planning checklist to help jump-start the conversation.

This step is all about getting things in order.

• Do you have a will that explains who should get your money and personal property after your death? 

Without one, the courts will decide, and they may not make the same choices you would. Their decisions could lead to disagreement among your loved ones, causing undue stress and conflict. 

• What about a living will and healthcare proxies that tell your loved ones what to do if you can’t speak for yourself?

When determining your wishes, think about what’s important to you, such as being independent, and what would affect your quality of life.

• Have you checked your beneficiary information lately?

Life events—marriage, divorce, the birth or adoption of a child, and the death of a loved one—can change who you want to receive your retirement savings. But just wanting someone to get your money isn’t enough. The beneficiary information on your retirement account is what matters.

Consider working with an estate attorney to create these documents and to help ensure you’re properly covered.  

Retirement can be within reach. It’s time to get ready!