Retiring in 2025? 3 Financial Moves to Make as Soon as You Resign From Work

The weeks leading up to retirement can be exciting and nerve-wracking at the same time. On one hand, you're getting ready to enjoy some newfound freedom. On the other, you're making a big change, which is a scary thing by itself. But you're also giving up the security of a steady paycheck, and you're venturing into a phase of life with a lot of unknowns.

That's why it's so important to start retirement off right. So if you'll be retiring in 2025, here are some essential moves to make sooner rather than later.

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1. Decide if you need Social Security

Just because you're ending your career does not mean you'll need to claim Social Security right away. In fact, depending on your age, you may not even be eligible for Social Security just yet.

The earliest age to claim Social Security is 62. But if you don't wait until full retirement age, your monthly benefit will be permanently reduced. And you should also know that delaying your Social Security claim past full retirement age results in boosted benefits (though that incentive runs out at age 70, so that's really the latest age you should file).

Take a look at your anticipated monthly spending and see if you can manage without Social Security if you're not yet at full retirement age, or if you want to delay your claim for a boosted benefit. It may be possible that, with some cutbacks or part-time work, you can hold off on taking benefits a while longer. Or, you might have enough savings to tap your nest egg a bit more in the near term, and then reduce your withdrawals once your Social Security checks start coming in.

2. Figure out what to do for health coverage

Medicare eligibility begins at age 65. But if you're retiring at a younger age, you'll generally need to secure health coverage outside of Medicare.

You may have the option to continue your employer coverage through COBRA. The cost there, however, could be quite high, since you're effectively paying the premiums for your workplace plan in full without an employer subsidy.

Also, you should know that COBRA typically maxes out at 18 months. If you're retiring at 64 and need to tide yourself over for a year, COBRA could be a good solution. Otherwise, you'll need to price out the cost of insurance to make sure you can swing it -- or to make sure you're deprioritizing other expenses as needed to put the right coverage in place.

3. Land on the right withdrawal rate for your savings

Hopefully, you're entering retirement with a decent chunk of money saved up. But whether your nest egg is closer to $300,000 or $3 million, it's important to manage that money carefully.

One important thing to do immediately is figure out how much you can afford to withdraw from your savings. Some financial experts will tell you to stick with basically the same withdrawal rate throughout retirement -- for example, to follow the popular 4% rule. But you may need the flexibility to tap your savings earlier (say, because you're not ready to claim Social Security), and then reduce your withdrawals later.

Either way, you shouldn't withdraw so much as a dollar from your IRA or 401(k) without having a plan. You don't, however, have to come up with that plan alone. Working with a financial advisor is a great thing to do here, because they can help you run the numbers and figure out how much money to safely withdraw based on factors that include your expenses, your investment mix, and even your life expectancy.

You may be looking forward to retirement and the positive changes it has the potential to bring about. But make sure to tackle these key moves right away so you're able to start off retirement on the right foot.

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