Retiring in a good year is challenging enough. But the 2023 retirement outlook includes a host of other major threats, such as high inflation and rising interest rates. Taken together, these trends have created an uncertain environment that would unnerve even the most careful retirement planners. But it is your personal circumstances that matter the most. Here’s a list of things to keep an eye on if you’re planning to ride off into the sunset in 2023.

  1. Review and optimize your portfolio -

Remember that you will be living on retirement savings for the rest of your life once you’re finished working. Check over all your accounts now to make sure they’re ready to handle the added pressure. Sit down with a financial advisor to go over everything you consider an asset, including retirement accounts, investments, and even your home. Don’t forget to rebalance any investments you have to reduce the amount of risk you’re exposed to when you no longer have a salary to rely upon. Consider rolling over your 401k to an IRA, where you will have more investment options and the ability to further diversify your portfolio.

  1. Check your Social Security account and know your options -

There are some variables to how much you can collect from Social Security each month depending on what you start receiving a monthly check from the government. As part of your financial assessment, use the Social Security calculator to figure out what you can expect from monthly disbursements depending on your age. You also may want to figure out if you can delay payments and instead use other retirement funds before dipping into Social Security.

  1. Pay down your debt -

When you’re living on a fixed retirement income, you won’t want debt hanging over your head. As part of your retirement process, identify all your debt, including your home mortgage, and think about finding ways to pay it off now.  This could free up your retirement funds for day-to-day expenses.  You might be able to save some cash by selling your home and moving to an area with a lower cost of living, and investing any profits could allow for additional spending money in retirement.

  1. Know your monthly budget -

It’s a good idea to figure out your monthly costs now so you know if you have enough to retire or if you wait until you save enough funds. Remember to include regular monthly costs like utilities, groceries, or gas as well as special one-time payments for travel or an expensive hobby you might want to pursue.  Reconsider any large purchases that might not be necessary.  Determine how much income you will have each month from your sources (portfolio distributions, social security, pensions, a side-hustle), and make sure you have enough to cover your expenses. 

  1. Reassess your health and plan for healthcare expenses -

You may not be as healthy and youthful as you once were, which could cut into your retirement savings as you get older.  Consider any health issues you have that require regular prescription medication or could cost more to treat later and factor those costs into your retirement budget. Medicare coverage begins at age 65, regardless of your Social Security full retirement age. When you enroll in the program, you will need to make decisions about Medicare supplement plans and prescription drug coverage or Medicare Advantage plans.  If you don’t have a Health Savings Account (HSA), you could consider getting one before you retire (and you are eligible). You can contribute to these with pretax dollars before you retire, and you won’t pay taxes on the withdrawals if they are used for qualified medical expenses. You can also take out for nonmedical reasons after you turn 65.

If you’re planning to retire in 2023, it’s good to get started on your plans now to have a solid foundation when you step away from your job. You’ll thank yourself later when you’re retired if you put your plans in place now!

a person in a blue suit

Melissa Talarico CRPC®, Financial Advisor


Direct: 585.340.2234