Money & Finance

Retirement Transition for Baby Boomers

Every day, it is estimated that 10,000 Americans turn 65. This vast increase of the retiree population will make our retirement vastly different from our parents’ experience.

Creating Your Vision

Every day, it is estimated that 10,000 Americans turn 65. This vast increase of the retiree population will make our retirement vastly different from our parents’ experience. As a result, a well-planned retirement transition becomes critical.

Retirement planning starts with establishing a vision that is your idea of an enjoyable and fulfilling retirement. Waking up one morning and not needing to go to work sounds wonderful, but for some people it can be like moving through a bereavement process. One day you have a focus or purpose and the next day you are adrift with a lack of purpose.

Preparing for retirement is all about getting a good life balance. Retirement is about doing all the things you promised yourself you would do when you were working that you didn’t have time for. As you approach retirement, it is good to take stock and think about what kind of retirement lifestyle you are going to have. Here are a few key questions to ask:


Do you have hobbies and interests to look forward to?

Our hobbies or passions have usually taken a backseat to our career and family. It is now time to start reengaging with those activities.


Are you planning to do some traveling?

The Internet has made it very easy to plan domestic travel. However, if you are traveling overseas to countries with which you are unfamiliar, it makes sense to employ a tour operator.  Should problems arise, it is nice to have a local presence to deal with it.


Are you planning to change your residence?

It is a major decision to keep your current house or to downsize.  Downsizing to a smaller, more economical house can make sense as far as lowering the monthly cost of maintenance or releasing equity to meet future living expenses. An appraisal of your home prior to retirement is useful. Is there any major work that needs to be accomplished or any significant changes that must be made to make your house retirement-friendly? These changes could be big expenditures that you might wish to complete prior to retirement.


Create a Budget

The next step in the transitioning process is to establish a budget of required monthly expenditures and annual expenditures for items such as travel or assets like a new car or a second home. This is also the time to obtain a clear understanding of the out-of-pocket health care cost that you might encounter as a retiree, including potential long-term care cost such as a nursing home.

This budget will serve as a building block for your retirement vision. The most critical step of this process is to compare your budget with your available assets and your reliable sources of income such as Social Security.

Answer the most important question prior to retirement: Am I going to run out of money? If running out of money is a potential risk, then it is nice to know prior to retiring. This risk can be reduced by increasing your savings prior to retirement, retiring at a later age, obtaining part-time work during retirement, or streamlining your retirement lifestyle.


Key Decision Milestones as Retirement Approaches

You will be making a number of age-related decisions as you get closer to retirement. Since many of them can affect benefits and/or your cash flow during retirement, it’s wise to be aware of them and coordinate your decisions with a spouse, especially if you are of different ages. Modern retirement lasts longer so your assets and income stream have to last longer, too. Here are some key milestones to keep in mind.


50 – Eligible for IRA and 401k catch-up provision

55 – Eligible for penalty-free separation from service withdrawals from 401k

59½ – Eligible to begin withdrawing from IRA and 401k penalty-free

62 – First eligible for Social Security with reduced benefits

65 – First eligible for Medicare

66 – Full retirement age (FRA) Social Security (born 1943 to 1954, FRA increases by two months for every year from 1955 to 1959)

67 – Full retirement age for Social Security (born 1960 or later)

70 – Maximum Social Security benefits (you must begin taking benefits)

70½ – Required minimum distributions begin the year after you hit this age


Kenneth_Whittaker_BWKenneth A. Whittaker, CPA/PFS, CFP®, CLU/ChFC, branch manager, RJFS, is a principal with Whittaker Cooper and serves as branch manager with Raymond James Financial Services.





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