Retirement planning checklist: income, health and timing

Good retirement planning comes down to four questions: when you will stop working, how you will cover health care at and after 65, where your monthly income will come from, and how you will protect it from the big risks. In New Jersey there is a fifth: how much of that income the state will tax, because New Jersey does not tax Social Security and offers a pension exclusion to people 62 or older or disabled whose total income is $150,000 or less. This checklist walks through each step in order and ends with a worked monthly budget for a hypothetical South Jersey couple. Jackie's no-cost Income Strategy Session covers the insurance and income side of these decisions; for tax and securities questions, work with your tax professional or a licensed financial adviser.

Which situation sounds most like you?

Jackie's Income Strategy Session starts by asking which of four situations is closest to yours, because the right plan looks different for each. Most of her clients fall into one or more of these groups.

• Healthy, active people planning retirement around the things they love, who want confidence that their income supports their lifestyle, with an emphasis on stability, income and the possibility of growth.
• People facing medical issues that will affect their retirement decisions, who want steady lifetime income and protection of principal while medical bills are a concern.
• Adult children who hold a power of attorney for a parent, or parents who plan to hand over their finances to an adult child, who need the goals and assets sorted out clearly.
• Widowed or single people who are very independent and do not want to depend on family or friends if disability or money trouble comes along.

Five or more years before you retire

• Create a my Social Security account at ssa.gov and check your earnings record for mistakes; your benefit is based on your highest 35 years of earnings.
• Estimate your retirement budget in two columns: essentials (housing, food, insurance, health care, transportation) and wants (travel, gifts, hobbies).
• List every income source you expect: Social Security, pensions, retirement accounts, part-time work, rental income.
• Decide whether you might retire before 65, because covering health care until Medicare starts becomes a major planning question if you do.
• Review life and supplemental coverage while you are still working and insurable, and note which coverage from work ends when you leave.

Social Security timing

Here is what that means in dollars, as an illustration only. If your my Social Security statement shows $2,100 a month at 67, claiming at 62 would pay about $1,470 (70% of $2,100), and waiting to 70 would pay about $2,604 (124% of $2,100, three years of 8% credits), before cost-of-living adjustments.

The right age depends on your health, your other income and, for married couples, the survivor benefit. When one spouse dies, the survivor can generally receive the larger of the two benefits, so a delay by the higher earner can protect the spouse who outlives them.

If you worked for a government employer that did not withhold Social Security, the Social Security Fairness Act, signed in January 2025, ended the Windfall Elimination Provision and Government Pension Offset, which had reduced many of those benefits.

Source: SSA: Delayed retirement credits.

How New Jersey treats retirement income

New Jersey's Division of Taxation lists Social Security and Railroad Retirement benefits as income that is not taxable in New Jersey. Pensions, annuities and certain IRA withdrawals are taxable for New Jersey residents, but if you or your spouse filing jointly were 62 or older or disabled on the last day of the tax year, you may be able to use the state's retirement exclusions.

The pension exclusion depends on your total income for the year. The table shows the amounts in the Division's current guidance for the 2025 NJ-1040. There is also an other retirement income exclusion, figured on a worksheet in the NJ-1040 instructions, for people 62 or older with total income of $150,000 or less and very little wage or business income.

Source: NJ Division of Taxation: Retirement income exclusions.

Health coverage at 65

• Your Medicare Initial Enrollment Period is the seven months around your 65th birthday month: the three months before, your birthday month and the three months after.
• If you are still working with coverage from an employer, the rules for delaying Part B are different; see our guide to working past 65 and Medicare.
• Retiring before 65? Plan how you will be covered until Medicare starts, for example through COBRA or a retiree plan, and note when that coverage ends.
• Budget for Medicare costs: the 2026 standard Part B premium is $202.90 a month and the Part B deductible is $283. Higher incomes pay more through IRMAA (the income-related monthly adjustment amount), based on the tax return from two years earlier; for 2026, joint filers with modified adjusted gross income above $218,000 pay a higher Part B premium. CMS usually announces the 2027 amounts around November 2026.
• Remember what Medicare does not cover: most dental care, routine vision, hearing aids and long-term custodial care.

A worked monthly retirement budget

Hypothetical South Jersey household, not a real client, and an illustration only. A married couple, both 66 and on Medicare, list their monthly income and spending. Their Social Security amounts would come from their own my Social Security statements, and the spending lines are their own estimates; the only published figure used is the 2026 Part B premium of $202.90 each.

The test is simple: does income that lasts for life (Social Security and the pension) cover the essentials? Here those sources total $4,250 a month against $3,855.80 of essentials, leaving $394.20 of room. The IRA withdrawals then pay for travel, gifts and taxes. If the IRA withdrawals had to cover essentials, the couple would be more exposed to a bad market year or a very long life, and that is when an Income Strategy Session looks at ways to add lifetime income or trim fixed costs.

On the state side, both spouses are over 62 and their total income is well under $100,000. New Jersey does not tax their Social Security, and under the Division of Taxation's table their pension and IRA withdrawals fall within the joint pension exclusion of up to $100,000. Federal tax is a separate calculation for their tax professional.

Illustration: a hypothetical example built from the rules and figures cited on this page, not a quote.

Turning savings into income

• Separate essential expenses from the rest. Many people like their essentials covered by income that lasts for life, such as Social Security, a pension or an annuity payout.
• Know your required minimum distributions (RMDs). Owners of traditional, SEP and SIMPLE IRAs generally must begin RMDs at 73, with the first one due by April 1 of the following year. For people born on or after January 1, 1960, the applicable age is 75 under the IRS final regulations.
• Keep an emergency reserve so a bad month does not force you to sell at the wrong time or take a large taxable withdrawal.
• Remember that withdrawals from traditional accounts count as income, which can affect Medicare IRMAA and whether you stay under New Jersey's pension exclusion income limits.

Protecting what you have built

Source: NJ Division of Taxation: NJ Income Tax, Retirement Income.

What Jackie checks for you

• Your key dates on one page: Medicare Initial Enrollment Period, any employer coverage end date, your planned Social Security age and your RMD year.
• Which Medicare path fits your doctors, prescriptions and travel, and what it will cost in the first full year, including Part B.
• Whether lifetime income covers essentials, and if not, whether an annuity payout is worth discussing as one option among several.
• Which risks you are carrying yourself (a hospital stay, a serious diagnosis, funeral costs) and whether a policy for any of them fits the budget.
• Beneficiaries on life insurance and annuities, so they match your current wishes.

Questions to ask yourself and your advisers

• If one of us dies first, which Social Security check stops, and does the survivor still cover the essentials?
• Which accounts would we draw from first, and how does that affect IRMAA and New Jersey's pension exclusion limits?
• Is our total income close to the $100,000, $125,000 or $150,000 lines in New Jersey's exclusion table?
• What health coverage will we have the day after the last paycheck?
• Where are our will, powers of attorney and policies, and who knows where to find them?

Every year after you retire

• Review your Medicare plan during the October 15 to December 7 Annual Enrollment Period, because costs, networks and drug lists change every year.
• Revisit your budget and withdrawal amounts after the Social Security cost-of-living adjustment is announced.
• Check beneficiaries on life insurance, annuities and retirement accounts.
• Keep your important documents (will, powers of attorney, policies) in one known place.

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The bottom line

You do not have to solve retirement in one sitting. Start with the dates (your Social Security age, your Medicare month, your RMD year), check how New Jersey treats your income, then match each income source to a need and cover the risks you cannot afford to carry yourself. Jackie's no-cost Income Strategy Session covers Medicare, income and insurance protection; it is not tax or securities advice. Call or text (856) 727-4221 to set one up by phone, Zoom, or in person.