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By Christine Benz | 07-22-2013 03:00 PM

What Goes on Your Retirement Readiness Checklist?

Those approaching retirement will want to update their personal balance sheet, optimize their spending budget and asset allocation, make a plan for Social Security, and more, says Baird's Tim Steffen.

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Christine Benz: I'm Christine Benz for Morningstar.com.

Getting ready to retire can be exhilarating and worrisome at the same time. Joining me to share some key tasks that should be on your to-do list is Tim Steffen. He's director of financial planning for Baird's Private Wealth Management group.

Tim, thank you so much for being here.

Tim Steffen: Happy to be here.

Benz: You've created a list of some of the key steps that should be on pre-retirees' to-do lists. I'd like to go through some of them today. The first one--it's a big one--is "create a financial plan." Can you talk about what sorts of things should be under that heading?

Steffen: It's a comprehensive plan--there's a lot that goes into it--but I think for most people it's the key part of any kind of retirement plan. You're going to want to start off with some sort of a balance sheet and a cash flow statement, or a budget, of some sort. Those two pieces will then go together to see if the assets that you have will support the desires in the budget that you want to support during retirement. So, that's really the starting point of the financial plan.

And then the closer you get to retirement, the more detailed, the more thought and time you're going to put into that. The simple retirement projection you may have done when you were in your 20s or 30s is going to evolve into something much more advanced as you get a lot closer to retirement.

Benz: So there's a lot packed into that heading of creating a comprehensive financial plan. Withdrawal rates, for example, are a very hot topic among our Morningstar.com users. Any other things that investors should make sure that they are investigating before they go ahead and retire?

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