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Many of us look forward to retirement, excited to live the life we have imagined, and ready to put down some of the burdens of work. (For some, a working retirement is actually preferred.) However, before you retire, it's important to plan ahead to make sure that you are ready when the time comes. Before you retire, here are 3 things that you should do:

1. Pay Off Your Consumer Debt

Consumer debt comes with high interest, and no tax deductions. Credit cards, car loans and other consumer loans drain away your wealth, and cause you to squander your money on interest payments. If you have consumer debt during retirement, it can be a really problem. Your cash flow is restricted by your obligations, and you might not actually be able to do the things you want to do.

I'd also consider making sure student loans are also paid off as part of this decision to pay off consumer debt before retirement. The fewer obligations you have, the better.

2. Pay Off Your Mortgage

Many of us are used to thinking of a mortgage as “good” debt. However, when you are retired, any obligation like that can be a real problem. Even with a tax deduction for your mortgage interest, having to make that regular payment can be a problem. Instead, you should try to pay off your mortgage before you retire. That will be one less expense for you during your retirement.

It is also worth it to consider selling your home altogether just before you retire. You should have plenty of equity built up, so when you sell, it can be fairly easy to turn that money around and buy a smaller house, or put the money in an interest bearing account or investment so that it provides you with a steady stream of income that can be used to pay rent on a smaller place. Some people find that downsizing can be attractive when they retire. Others don't want to have to worry about maintaining a home as they age, and prefer to move into a rental or some other facility where they don't have to worry about upkeep and maintenance. Consider your options, and what is likely to best suit you.

3. Have an Idea of What You Want to Do

You should also consider what you want to do well before you retire. Think about whether you want to pursue a hobby, travel, volunteer — or combine all three. Think about what would help you feel good about your retirement, and your life. Having a plan can help you figure out what you need to do in terms of saving money in a retirement account. You can start planning your transition into your retirement lifestyle ahead of time, so that the change is smoother. Someone planning to do a great deal of volunteer work and visit children and grandchildren will plan differently from someone who plans to play a lot of golf and travel. Know what you will want to do, and plan for it, and you will be more likely to have the retirement you want.

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