10 Exceptional Tips for the Average Joe or Jane as You Transition to Retirement

We boomers were never average.  As the “me” generation, our uniqueness is a badge of honor.  However, approximately 10,000 of us transition to retirement everyday.  And, while we each have specific goals, ideas and financial circumstances, there are some things that apply to us all.

transition to retirement

Here is some exceptional retirement advice advice for the average guy, gal or duo.

1. Get the Big Universal Decisions Right

As you transition to retirement, almost everyone will make a lot of critical decisions including: When to stop working? When to start Social Security? Where should you retire?  And more…

Be thoughtful about your choices and try out different scenarios — especially if you do not have significant savings. These decisions can have a dramatic impact on your quality of life in retirement:

  • Working a little longer is a triple treat: 1) You earn more income for a longer period of time. 2) You can save more. 3) You can delay tapping existing savings.
  • Where will you retire? If you own a home, it could save your retirement.  Consider if and how you might tap into your home equity.

Try out different scenarios in the NewRetirement retirement calculator.

2. Tiptoe into Retirement Instead of Jumping Right In

Retiring used to be a big event with parties and gifts and an abrupt end of work and the beginning of a lot of free time.  However, these days more and more people are switching to retirement jobs or working part time before they quit the labor force entirely.

Other ways people tiptoe into retirement include:

  • Taking a long vacation or sabbatical to recharge instead of retiring.
  • Trying out (renting in or spending time at) a retirement destination, before packing up and moving.
  • Making sure you can live on the budget you need to stick to in retirement.

3. Think About Passive Income

Passive income is exactly what it says it is — income that you earn without very much effort.  The most popular (and perhaps profitable) form of passive income is a real estate investment. However, you don’t necessarily have to be able to afford an apartment building to benefit from passive income.

Here are 5 new and creative ideas for passive income streams in retirement.

4. If You Have Savings, Think About Your Goals and How You Are Invested

There are a lot of different philosophies about how people approaching and already in retirement should be invested.

Some of the advice you hear includes:

  • Your savings should be held in low risk (and probably low return) investments.
  • Preserve your capital and live off interest.
  • Think about systematic withdrawals so that your income from investments remains steady over your lifetime.
  • Make sure your investments can grow to keep pace with inflation.
  • Focus on income from investments, not asset growth.

The contradictory and sometimes irrelevant advice can be very confusing.  The reality is that there is a no one size fits all approach for retirement investments.

The best investment strategy for you will depend on the value of your assets, how much income you have from other sources, your monthly expenses, your goals for retirement, your desire for leaving an estate, and more.

You can try out multiple scenarios in the NewRetirement retirement calculator.  Experiment with different investment return scenarios and more.  The transition to retirement may also be a good time to discuss your situation with a financial advisor.  Just be sure to work with someone who has your financial interests in mind — not their own financial gain.

5. Prepare for a Long Haul – Set Up a Long Term Budget

Retirement can be a long endeavor.  If you retire at 65, you could easily spend 30 years enjoying life.

When you retire, you are agreeing to live off relatively fixed finances.  As such, you really need to know how much you are going to spend when.

You will want to think about how your spending levels might change over time.  Most people spend a little more when they first retire.  Then, less as they get a little older.  And finally more — mainly on healthcare — near the end of life. When thinking about your retirement budget, you also want to include any big one time expenses you might incur for things like education or travel.

The NewRetirement retirement planning calculator let’s you do this kind of lifetime budgeting.  Set as many different spending levels as you like.

6. Consolidate and Simplify Accounts

If you have not already done so, the transition to retirement is a good time to consolidate your savings and banking accounts to simplify your money management.

Too many people enter retirement with old 401ks and IRAs.  Having multiple accounts can be difficult to manage and it may increase the fees you are paying.

A few tips for consolidating your accounts:

  • Ask a lot of questions about fees.
  • Consider your investment options.
  • Do rollovers VERY carefully to avoid withdrawal penalties.

Learn more about rollovers.

7. Think About Friends and Family

With so much to think about as you transition to retirement, sometimes the most important parts of life like friends and family can get a little lost.

Social connections are one of the most important factors for your emotional and even physical health.  And, many people really miss daily interactions with people when they stop working.

As you think through your retirement plans, be sure to factor in your loved ones.

  • Will your retirement lifestyle decisions enable you to maintain your friendships?
  • Do you have a plan for seeing people on a regular basis?
  • If you are relocating, how will that impact your relationships?
  • Will your children need or want financial support?
  • Will they contribute to your retirement finances or long term care?

8. Start a Retirement Club

Have you ever benefited from networking for work?   What about when you first had kids? Weren’t things a lot easier when you had other parents to talk with about diapers and being up in the middle of the night.

Wouldn’t it be nice to be able to chat and commiserate and brainstorm about retirement with your friends?

If this sounds appealing, maybe you could set up a retirement club — kind of like a book club, but you discuss retirement topics instead of the latest best seller.  Possible themes for each meeting could include:

  • Round the room sharing about what is good about your retirement plan and where you could use some help.
  • Bring in an investment advisor to talk about your options.
  • Discuss different Social Security options.
  • Everyone shares a retirement article in advance of the meeting and you discuss what you read.

Research into financial literacy has found that your peers can have a huge impact on your success.  In the same way having a work out buddy gets you exercising more, discussing finances with friends can be motivating.

9. Write or Update Your Medical Directives

Your estate plan is important, but probably of bigger consequence to your own well being are your medical directives.  What are your plans for a catastrophic medical event?  What do you want to happen if you need some kind of long term care?

These are issues that will effect your very well being and your relationships with friends and family near the end of your life.

Here are some estate planning and advance directives resources.

10. Don’t Be Afraid to Have Fun and Be Happy — Get Creative if Necessary

There is a lot to worry about as you transition to retirement, but don’t ever lose sight of the fact that this is your time.

Research from  Merrill Lynch, “Leisure in Retirement, Beyond the Bucket List,” finds that most people have anxiety leading up to retirement, but find that once they take the plunge, they are very happy.

If you are worried about finances, dig deep and prioritize what is important to you.  Keep your focus on your priorities and make sure you can do those things.

  • There are many tips for retirement travel on a budget.
  • If you are worried about paying for rounds of golf, maybe work part time at the course to subsidize your hobby.
  • Want to see the grandkids more?  Can you move closer?

Still worried? Studies find that having a retirement plan helps alleviate the stress.

Apply these tips and more to your retirement plan



Feel Free In RetirementWelcome Back %greeting%!

Retirement Calculator: Get On Track Now Login to the NewRetirement Planner.
Try a new scenario. Make updates. Assess the status of your future.