1. The big stress my clients have at retirement concerns medical issues. If you aren't healthy or have bad genes, make sure that you have adequate health care coverage when you leave. It's a lot easier at 65 when you qualify for Medicare. Then all you have to do is purchase a Medicare supplemental health insurance, but if you retire earlier, you will need personal coverage which could be pricier. Figure out the right medical plan for you. Don't scrimp on good medical insurance even if your employer will pay for part of it. That can always change in the future.
2. Another myth at retirement is that you will need at least 70% or more of current income to be comfortable. Not so. Depending on your lifestyle post-retirement, you may be spending more than your current salary because for example, you want to spend a summer in Italy. You could also be spending less by moving to a smaller home or a less expensive region. The point is to target a spending plan that you can afford and that meets your post retirement lifestyle.
3. Don't wait till 6 months before you retire to figure it all out. Start planning your ideal lifestyle, income needs, and benefits that you will receive at least a year before you walk out. By doing so you will feel more confident and the transition to your new life will be welcomed.
4. Get informed about your social security benefits before you retire. Also check into your withdrawal options for any pension, retirement plan or annuities you may have. Be sure that you understand the taxation on your withdrawal amounts. You may choose income from different accounts in order to keep your tax liability down.
5. Think you will be bored? Think again. Many retirees buy into franchises or try their hands at consulting or opening up their own business that they have dreamed of having for a long time. It can be a very exciting and liberating time for you if you plan for that. Start researching these avenues long before you quit so that you will be fresh and ready to start your new job.
Ways of remaining active come in many guises. Some clients of mine just want to spend the whole summer together with their kids. Many want to travel without the burden of children or an itinerary. Many will continue to work part-time to supplement their income. Others will take classes to learn a new skill or do volunteer work in an industry they enjoy, or engage in a hobby they love. This is an exciting time in your life to either kick back or ramp up and there are plenty of choices no matter what your income. But proper planning and preparation is essential to a smooth transition.
