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Retirement.  Some view it as a destination, others view it as a journey.  Regardless of how you perceive that day when work becomes an option, there are things you can do before you retire to make your golden years less stressful and enable you to enjoy the fruits of your labor.

  1. Buy your major expense items:  Do you have home improvement projects that have been put on the backburner, e.g., a new bathroom or a new kitchen?  Will the roof need to be repaired anytime soon? Paying for these big ticket items may put a strain on your wallet while you’re working, but imagine how your retirement lifestyle could change and how stressful it would be if you had to make these purchases early on when you are no longer earning an income AND adjusting to a new way of life.  It’s much easier and less stressful to take care of the major expenses while you’re earning a paycheck rather than while you’re trying to live off of a fixed income.  
  2. Pay off your debts:  When you’re receiving a regular paycheck, the debts you have may not be a big concern because you know the funds will be coming in to pay for them.  However, when you’re trying to manage an income stream based on your investment assets, it’s a relief to have a lower cash outflow requirement to pay for your monthly necessities.  To some, this can mean  that their money will last longer in retirement.  To others, it may mean the ability to have more money accessible for the passions they wish to pursue in their golden years. 
  3. Have a plan and discuss these plans with your spouse:  Many of us have different reasons for why we want to retire.  Some are tired of working and want the opportunity to not have to do anything.  Others want to travel and do the things which they aren’t able to do while they are working.  While you may have an idea of what you would like to do, have you ever asked your spouse what he/she would like to do?  If the two of you aren’t on the same page, it can not only lead to financial conflict on how the money is spent, but can also lead to unhappiness due to a lack of fulfillment and purpose.  Clients without a plan may also become the default “go to” person for taking care of family members ranging from their aging parents to their newborn grandchildren.  While you probably don’t mind helping out your family members from time to time, you may not want to spend your golden years taking care of everyone else as a full time job.  Discussing your plans for retirement with your spouse can reduce any unwanted plans that others, including your spouse, may have made for you.  
  4. Make a thorough budget:  Once you know what you want to do in retirement, you can then project what some of these activities will cost, and in turn, compare that with your monthly income derived from your retirement assets.  You may find that the cost of these activities exceeds your income, especially if you want to do these activities early on and over a short period of time.  If this is the case, you can make an informed decision to spread out the time in which you do these activities.  An alternative is to purposely save for these activities while you are still earning a paycheck so that the additional costs are within your retirement budget.  
  5. Talk with your financial professional:  Your financial advisor is your sounding board to 1) give you confidence that you can retire or 2) give you constructive criticism of possibly delaying retirement to help position you so you don’t have to go back to work.  He/she can help you figure out which accounts you may want to withdraw from, how much to withdraw, and how long your money may last.  Your advisor can also act as an intermediary between you and your spouse when your ideas are not in sync, and can help ensure that the plan you put in place will stay in place when one of you, particularly the financial lead person, passes away.

To many, retirement can be thought of as a phase in life.  As with any phase, there will be many great memories made and precious time shared with those we care about most.  By considering and following the five items listed above, you can decrease potential stress and increase your chances for financial success.  



*To qualify for the tax free penalty free withdrawal of earnings, a Roth IRA must be in place for at least five tax years, and the distribution must take place after age 591/2 or due to death, disability, or a first time home purchase (up to $10,000 lifetime maximum).  Before taking any specific action, be sure to consult with your tax professional. Plan distributions may be subject to tax and 10% penalty if withdrawn before age 59 ½. 

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