If you’re a retiree coming into the new year, it’s a great time to think through your financial goals for the next 12 months. This could be an opportunity to rebalance your portfolio to reduce (or increase) your risk, or it might be an opportunity to think about some new projects you want to undertake. 

Unsurprisingly, billions of people worldwide make resolutions for the new year. This includes but is not limited to retirees who may want to do nothing more than improve their finances. However, this is also a great time to step back and ask yourself a few simple retirement-focused questions.  

Am I Spending Wisely In Retirement? 

This is the most important question anyone can ask at the start of a new year. One of the first things a retiree can do at the beginning of 2025 is to review their budget and ensure they are not overspending. The bottom line is that they need retirement savings to last, and overspending can be a massive danger to ensuring it does not.  

Start by evaluating spending habits and ensuring that disposable cash expenses, like going out to eat, taking vacations, or even those necessary spa days, are not costing more than necessary. Budgeting is critical in the new year because retirees want enough money to handle surprises like a home emergency. 

Do I want To Update My Portfolio Allocation? 

Regarding properly managing money, the new year is a great opportunity to see how a portfolio is balanced. For example, let’s say that right now, you have 10% in cash, 40% in stocks, and 50% in bonds. You might want to adjust these percentages based on your needs, updated expenses, budget planning, and potentially build up an emergency fund. 

You might see more growth outside the market, so you might want to reallocate funds to safer bets. Alternatively, suppose you see a good opportunity to cash out and reinvest in different stocks. In that case, this is also an option to discuss with a qualified financial advisor who can review the current portfolio and recommend changes. 

What Is My Contingency Plan for Unexpected Costs? 

While we can all hope that unexpected costs never happen, they can and frequently do. Combined with double checking overall spending, any retiree should carefully consider what financial moves they would need to make if a large unexpected cost were to arrive. This could include a large home repair, a medical emergency, or a family member needing financial assistance. 

The best move would be to create a separate emergency fund in the new year that offers 6-12 months of living expenses. This fund, alongside any carefully reviewed insurance policies, will help create peace of mind should the worst-case scenario happen in 2025. 

What Is My Bucket List for 2025? 

Reviewing a budget and looking to establish an emergency fund begs the question of what exactly any retiree would like to accomplish in 2025. The answer might be nothing, as they want to sit around and enjoy the golden years. However, there may also be something they have meant to do and hope to accomplish this year. 

The bucket list might include something large like traveling far away, visiting a new restaurant, or learning a new language. Bucket list items don’t have to be expensive or challenging, but they do have to be meaningful and worth accomplishing. 

Am I Prioritizing My Health? 

While it’s one thing to prioritize your financial situation with a new budget, it’s an entirely different conversation to prioritize your health. Ask yourself if there is anything you want to do this year that you may have been putting off. This may be getting a checkup or a medical procedure you have been trying to keep from doing for years. 

Separately, you should ensure all your healthcare costs are in order. Evaluating your medical plans like Medicare, Medicare Advantage, and Medigap is a critical step to take every year. Are you on a new prescription drug in 2024? To prepare you for unexpected healthcare costs, see what medicine is covered and how it’s covered in 2025. 

Do I Want to Downsize Or Relocate? 

As retirees review their budget, bucket list, and health, they might consider downsizing or relocating. Any thoughts around downsizing might be motivated by financial, physical, and mental health reasons. Financially, downsizing could allow more money to be put away for enjoyable activities. 

This might be a physical or mental consideration if you want to relocate. This is especially true for those who wish to relocate from a cold-weather climate to a warm-weather one. The idea of not having to wake up and worry about snow or cold might be worth its weight in gold for any retiree looking for an easier life. 

Relocating might also be a consideration to be near family, a healthcare facility important to any ongoing health issues, or simply a desire to downsize and relocate for a lower cost of living. 

What Is My Estate Plan? 

As painful as it might be to think about what happens after you are gone, the start of a new year might be a great time to re-review or establish an estate plan. The most important thing is that you don’t want to trouble your family with any immediate concerns or expenses upon your death. This is why an estate plan will help affirm your wishes should anything happen that will help them focus on grieving. 

In addition, you want to ensure any estate plan minimizes tax burdens on your beneficiaries or heirs. This means looking at a living will, updating any trust, or even updating any beneficiaries to align with any new circumstances that might be relevant at the start of the new year. 

Do I Understand Social Security Benefits? 

Depending on where you are in retirement, specifically if you are between the ages of 62-70, understanding Social Security benefits in 2025 should be an important question. Have you delayed taking benefits past your Full Retirement Age at 67? For example, if you are turning 70 this year and will start receiving Social Security payments, knowing how this affects your spending and taxes is essential. 

Have you recently gotten remarried while retired? It’s important to consider what changes will be made to your spousal benefits. This could potentially increase your overall payout, so working with a financial advisor who can help guide you through these changes that might have been a part of recent legislation will be necessary. 

Am I Ready For the Next Stage Of Retirement? 

One of the least considered but often most important questions for retirees to ask in 2025 is where they stand emotionally. Are they ready to explore a new hobby, relationship, or volunteer opportunities? Perhaps there is a renewed interest in more social activities, all of which come with a need to ask yourself as a retiree if you are ready for these next steps. 

There might even be a consideration about doing some part-time work. Not only is there a financial benefit, but there might be a desire to maintain a sharp mind and repurpose skills learned and refined over a lifetime of working.

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