15 Key Retirement Planning Steps to Check Off Your To-Do List

To retire with the financial security that you deserve, there are steps that you should take both throughout your life and before giving notice to your employer that you're leaving work for good.

Not sure where to start in getting ready for your later years? Here are 15 must-do retirement preparedness tasks that you need to check off your to-do list.

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Social Security is one of the most important income sources for seniors. And benefits are based on average earnings over the course of your career.

That's why it's so crucial to check your Social Security earnings statement at least once per year by signing into your mySocialSecurity account.

By confirming that your earnings were reported correctly, you can make sure to get credit for all the money you've made -- and that you get the largest retirement benefit possible based on wages earned over your career.

Average wages affect Social Security benefits, but so does the age when you first start getting checks.

Social Security can be claimed as early as 62, but early filing penalties apply to retirees who start benefits prior to full retirement age (between 66 and 2 months and 67). These permanently reduce monthly income.

Retirees can also earn a benefit increase from delayed retirement credits, which are available for each month of delay after FRA until 70.

It's important to decide when you'd like to claim your benefits as this will influence the amount of supplementary savings you need.

You may need money to support you while you wait to file for a delayed benefit, or may need to anticipate lower monthly income from Social Security if you plan to start checks early.

Estimating the likely amount of your Social Security checks (based on average wages and full retirement age) is one of the most important parts of making your retirement plan.

See, these benefits replace only around 40% of pre-retirement income, but many future retirees don't know that.

Without a realistic idea of how much money you'll actually get in benefits, you won't know how much income your savings has to produce. That can make setting retirement goals really hard.

ALSO READ: Are You Being Unrealistic About Social Security's Role in Your Retirement?

Retirees may be taxed on Social Security if their income is above a certain threshold or if they live in certain states.

Understanding whether taxes will take a bite of your benefits helps you develop realistic ideas about how much retirement income you'll have left to live on. It can also shape your choices about where you live as a retiree.

You'll also need to understand the rules for taxation of withdrawals from traditional and Roth accounts. That will help you decide which is best for you.

Taking advantage of tax breaks for retirement is crucial to achieving financial security. And there are a number of tax-advantaged retirement accounts -- each with their own pros and cons.

If you think you'll face a higher tax rate as a retiree, you may prefer an account that defers your tax savings until you make withdrawals. These include Roth 401(k) and Roth IRAs.

If you suspect the reverse and think you'll face lower taxes as a senior, traditional 401(k) or IRA accounts may be preferred.

You'll also need to consider factors such as ease of investing, investment options, and fees when deciding what kind of retirement plan is best.

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With certain types of retirement plans, seniors are required to begin taking required minimum distributions (RMDs) starting at age 72. There's a steep tax penalty for failure to do so.

Knowing these RMD rules is crucial when deciding what kind of investment plan you want to use.

You'll also need to know about RMD requirements when making plans for retirement account withdrawals in your later years.

ALSO READ: What Are Required Minimum Distributions?

If you have a 401(k) retirement plan at work, you should find out if your employer offers a matching contribution. If it does, you'll need to know how to earn it.

A matching contribution is money your employer puts into your 401(k) account when you make your own contributions.

It's free money that bolsters your retirement savings efforts, and you definitely want to follow the requirements to get the full amount of it.

Some Americans are entitled to a Saver's Credit if they make eligible contributions to retirement accounts. This credit could be worth as much as $2,000.

Tax credits reduce the amount of your tax bill on a dollar-for-dollar basis. They are very valuable and making saving for retirement easier, so you should be taking advantage of the Saver's Credit if your income isn't too high to do so.

Once you know the amount of income your retirement investments must produce -- and what amount you must contribute to retirement accounts to earn the maximum employer match and tax credits you're entitled to -- you can decide how much to invest each month.

Setting monthly savings goals helps you to stay on track to building the retirement nest egg you need. Calculators on Investor.gov can help you figure out how much monthly savings are required to stay on track to reach your target savings amount.

If you don't ever want to miss a retirement account contribution, automating the process is the best way to make sure that doesn't happen.

By setting up automatic transfers from your paycheck or bank account to your retirement account, the right amount of money will effortlessly go where it needs to without any action on your part.

This makes it much more likely you'll consistently invest the amount you need for a secure future.

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Knowing when you plan to retire will guide many of the decisions you need to make about when to claim Social Security and how much to save.

While it can be difficult to predict exactly how long you'll be able to work, you can and should take the time to think about whether early retirement is a goal or if you'd be OK with delaying to provide more time to save.

Where you live affects your taxes, and also your cost of living.

If you hope to set up house in one of the more expensive parts of the country as a retiree, you'll need to have more money invested for your future. If you're OK with relocating to an area with a lower cost of living, you may be able to afford to retire with less.

You have many different options for where to put your retirement nest egg. Depending on the kind of account you have, you may be able to invest in individual stocks, bonds, exchange-traded funds, mutual funds, cryptocurrencies, or other assets.

You'll want to pick a mix of different investments to create a diversified portfolio. You also want to make sure you're investing only in things you're knowledgeable about and not taking on too much risk given your age and retirement timeline.

ALSO READ: Understanding Asset Allocation for Your Portfolio

Before retiring, seniors must pick a safe withdrawal rate. That refers to the amount they take out of their investment accounts.

There are different approaches, including following the 4% rule and taking 4% out in year one, after which you adjust upward for inflation.

The right strategy will ensure retirees won't run out of money too soon. It also determines the amount of income investments can produce, so researching withdrawal rates early on is helpful to setting savings goals.

Finally, if you owe money, it's helpful to make a plan for paying as much of it as possible before retirement.

Leaving work with debt means some of your fixed monthly income will be devoted to paying interest. This can make it harder to survive on your nest egg as a retiree.

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Completing each of the 15 tasks on this to-do list will help you ensure you have the maximum Social Security income and savings possible to support yourself as a retiree. You can set yourself up for financial security and ensure that your later years are a time that you enjoy -- just as you deserve.

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