15 Crucial Tasks to Do in Your First Year of Retirement

The decisions you make early in retirement can affect the money available to you for the rest of your life.

It's important you make smart choices about spending, saving, and investing as a new retiree, so you don't shrink your Social Security benefit, drain your nest egg, or make other major financial errors that come back to haunt you.

To ensure you don't inadvertently compromise your future financial security, aim to check all 15 of these tasks off your to-do list in your first year of retirement.

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As a retiree on a fixed income, it's crucial that you don't overspend. As a result, you should set a budget ASAP. This will allow you to consciously decide where your money is going and make sure you aren't living above your means.

You'll want to make sure you understand exactly what financial resources you have available to you to cover your costs during the rest of your retirement.

As a result, you should do a detailed accounting of your assets including your retirement investment accounts, savings accounts, pension funds, homes, and vehicles.

By taking stock of where you are, you can make more informed choices about how to use your resources wisely -- and make them last.

You don't want your savings to run out while you still need it, so you can't withdraw too much from it at once. If you drain your account too quickly, your investments won't be able to earn reasonable returns that help keep your account balance from dwindling.

There are many different ways to decide on a safe withdrawal rate, but one option is to use required minimum distribution tables from the IRS to see how much to take out based on your age, life expectancy, and account balance.

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Emergencies don't stop as a retiree, and you may actually be less equipped to deal with them since you won't have a paycheck coming in.

The last thing you want is to have to make a large withdrawal from your retirement accounts -- or to go into debt -- just because of big, unexpected expenses. So make sure you have a hefty emergency fund.

If you don't have enough cash to cover three to six months of living expenses, consider including emergency savings in that retirement budget you're making.

Once you start withdrawing money from your retirement investment accounts, you can't afford to take on as much risk since you don't have time to wait out downturns.

You'll need to assess how much risk you want to be exposed to and adjust your investment portfolio accordingly. One good rule of thumb is to subtract your age from 110 to determine the percentage of your portfolio that should be invested in stocks.

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You'll need to rebalance your portfolio regularly in retirement to achieve the right level of risk tolerance and make sure you're diversified.

That's because your risk tolerance changes, as mentioned above, and because your investment accounts could become too heavily concentrated in particular assets that outperform others.

It's a good idea to rebalance as soon as possible after leaving the workforce to reduce the risk of losses you can't afford. Then, rebalance again around once per year at least.

When you retire, you don't automatically have to claim Social Security -- unless you really need the money.

Sometimes, delaying the start of your benefits is the best strategy because putting off a Social Security claim can increase your monthly income.

You'll want to research how the program works and different claiming strategies to see what's best for you. And it's a good idea to coordinate with your spouse if you're married, as you may need to make strategic decisions to maximize not just your benefits but also survivor and spousal benefits as well.

ALSO READ: 5 Secrets to Supersizing Your Social Security Checks

As a retiree, you are subject to different tax rules.

For example, once you reach age 72, you must take required minimum distributions from certain tax-advantaged retirement plans such as your 401(k). Otherwise, you could face a hefty penalty equaling 50% of the amount you should've withdrawn.

You should also research the rules for taxation of retirement income, including Social Security, so you'll know what to expect and how much income you'll have left over after the government takes its cut.

When you were working, chances are good your employer simply withheld money from your paychecks and sent it to the IRS for you.

Now that you're retired, however, you'll need to take more control over paying taxes. This could mean arranging for taxes to be withheld from Social Security checks or retirement account distributions -- or paying estimated taxes during the year to avoid penalties for paying late.

Having the right health insurance coverage is crucial.

If you've retired after 65, you should be eligible for Medicare. But you may still want a Medigap or Medicare Advantage policy to get more coverage than traditional Medicare provides on its own.

If you aren't yet 65, you'll need to find another solution for covering healthcare costs -- which could include COBRA coverage. It's important to research what coverage is available to you as soon as you retire because you can't afford to take a risk of going without coverage even for a little bit.

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Downsizing your house to a smaller space could help you reduce or eliminate your mortgage payment, which would free up money for other expenditures. You could potentially even boost your retirement account balance if you can sell your home for more than you need to buy a new one.

Downsizing can also give you less property to take care of, in addition to shoring up your financial situation.

Debt can be a huge burden for retirees as the interest costs can eat into your limited income. If you haven't paid off debt before retiring, make a plan to do so ASAP in your first year after leaving the workforce.

Aim to pay extra to become debt free quickly, or consider refinancing to make debt payoff easier and cheaper and to free up more money for other things.

ALSO READ: What to Do if You're Approaching Retirement With Credit Card Debt

Leaving the workforce is a major life change, so it's a good time to take stock of your estate plan. This is especially true if you had life insurance through an employer and you've lost this coverage.

You want to make sure that your assets are going to the people you care about and that you're doing what you can to protect your wealth during retirement so you can leave behind a legacy.

Long-term care can be extremely expensive, and if you require it even for a short time, you could drain your retirement nest egg. This could be devastating to you or your spouse.

To make sure you don't end up broke later in life because of expensive nursing home or home care, make a long-term care plan as soon as possible during your first year of retirement, if you don't already have one in place.

This could involve buying long-term care insurance or working with an attorney to make a Medicaid plan to get care covered while protecting your wealth.

Finally, you'll want to make sure you and your partner are both on the same page about how you'll spend your time and money as a retiree. This could be especially important if only one of you has retired and the other is still in the workforce.

By working together, you can create a retirement that's enjoyable for you both -- and that helps you to ensure a secure financial future.

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You deserve to enjoy financial security throughout your retirement years, and that means you should take the right steps early on to ensure you get it.

As soon as you retire, start working on taking care of these 15 crucial tasks so you can get off on the right foot and make sure you have the money you need both now and later.

You'll be happy you did when you can enjoy the rest of your life without major financial worries.

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