Those early days of retirement can be exciting as you are finally rewarded with a little rest and relaxation after all those years of toil. But it can be a bit unsettling, as well, when the regular paychecks you counted on stop appearing in your bank account. That’s why anyone who’s still a few years away from retirement should ask themselves: Am I ready for that moment both financially and emotionally?

The answer could come down to whether you have a solid retirement plan – or a plan at all.

“Regardless of how much you accumulate for your retirement, poor planning or lack of planning can put you at risk of exhausting your resources,” says Tad Hill, a retirement planner and author of “Retire with Freedom: The Five Steps to Getting a Good Night’s Sleep After the Paychecks Stop” (askfreedomfinancial.com).

Hill says people nearing the end of their working years should:

• Create your ideal picture of retirement. What is it you want out of retirement? Do you want to travel? Volunteer with a charity? Spend time with the grandkids? The first step isn’t about your financial portfolio, Hill says, it’s about forming a clear image of the big “why” of your ideal retirement. “Otherwise, even though your money may last the rest of your lives, you may never achieve your dreams because you’re unclear on your dreams,” he said.
• Put your situation to the “stress test” with the help of a financial professional. That can include reviewing how to best maximize your Social Security benefits and examining how your portfolio might perform under a variety of market scenarios. “Analyze all the factors that could affect your retirement plan over the next few decades and create a strategy for dealing with those risk factors with as much certainty as possible,” Hill said.
• Design your plan. Designing a retirement plan, Hill said, is like creating the blueprint for a house. Some of the concerns that need to be addressed include income planning, investment planning, health care planning, tax planning and legacy planning.
• Build the plan. Once the design is agreed upon, it’s time to implement it. “That can mean making changes to your current structure, adding some things and getting rid of others,” Hill said. “Maybe risk-prone aspects of your current approach that we need to eliminate were discovered in the design step. We also often identify new strategies that you aren’t using that can really make a difference.”

Seek continued guidance. Even a great retirement plan may need tweaks and adjustments over the years. “You need to look at whether there are things that have changed in your life that need attention,” Hill said. “Are there decisions you need to make about a pension or Social Security? Is your spending tracking at the amount you thought it would?”

“There are no guarantees of anything in life, including how your retirement will work out,” Hill said. “But taking action to create a solid and plan for this important part of your life is a critical first step.”