Retirement is often viewed as the reward for our hard work and dedication. It truly is the “end of the rainbow”. For those lucky enough to realize their goal of retirement, they now have to transition to the next phase: the challenges of life after retirement. Living the “good life” in retirement is largely dependent on how well we have planned for this critical stage of our life. Life as a retiree presents a myriad of financial responsibilities and concerns.

Here is a checklist of the major considerations:

1. Review retirement income from all sources including Social Security, employer pensions, 401(k) or 403(b) as well as private retirement accounts such as an IRA and/or annuities.

2. Evaluate your income from non-retirement sources such as long-term taxable mutual funds, stocks, cash savings and other investments.

3. Create a retirement budget. This budget can help you figure out your expenses for your post-retirement lifestyle. Plan to live on far less. You may want to splurge occasionally but developing a mindset of frugality will help you stretch your savings in retirement. Many individuals who have just retired or those nearing retirement often tend to underestimate their expenses. Rising healthcare costs and health insurance can take big chunks out of a retiree’s income. Try to pare down or eliminate any unnecessary expenses. You may or may not need cable television or even want the internet. You may also wish to get rid of cumbersome personal belongings such as excess furniture. As some individuals get older, they begin to value the freedom of a minimalist approach to daily living. Before making charitable donations, consult with a tax professional as to any tax deductions for which you may be eligible. There are stringent rules regarding tax deductions for charitable donations.

4. Consider downsizing. This may not be an option for everyone. Many people are attached to their large homes. However, it may be prudent to evaluate how much you can actually save by downsizing in terms of property taxes, maintenance and miscellaneous expenses. Relocation is another option. Many individuals find that they can save substantially on taxes by relocating to a state that does not tax income or impose a sales tax. Some states have a sales tax for all purchases; others may tax selectively some items.

5. Withdraw only the basic minimum from your savings and investments that you would need in order to meet your monthly expenses. Withdraw amounts in stages slowly. Think about conservation of assets and do not take any aggressive risks. You never know when the financial markets will take a sudden downturn. Consult with a professional retirement specialist who can help you formulate a strategy for withdrawals. There are also tax consequences for withdrawals from tax-deferred plans. Review your portfolio regularly.

6. Put your lifelong skills and experience to work in a fulfilling part-time job. There are part-time jobs in the areas of accounting/bookkeeping, administrative support, counseling, consulting, education, healthcare as well as the nonprofit sector.

7. Depending on your individual health and personal circumstances, long-term care insurance may or may not be a priority. However, it may be something you want to discuss with a financial planner before making any decisions. Long-term care insurance is generally expensive, especially if it is bought later in life. One should also gather information about assisted living facilities.

8. Organize your financial statements, legal documents and tax records. Everything should be easily located. Your will, for example, should be current. Estate planning is an integral component of sound financial management. Your estate plan should be reviewed periodically to reflect any changes in tax laws or in your personal and financial situation. A knowledgeable attorney who specializes in estate planning can assist you in establishing charitable trusts.

Closing Thoughts:
Retirement is only the beginning, it is not the end. The whole concept of retirement is undergoing a fundamental shift. In fact, rather than retirement planning which is often perceived as vague and distant, the emphasis should be on building lifelong financial security.


For informational purposes and not intended as advice.