Transitioning Into Retirement

Many Americans often have trouble transitioning into retirement

, both emotionally and financially. The difference between working full time and retiring can be staggering, resulting in lack of preparedness before retirement and difficulty in coping with the retirement lifestyle. For one, workers entering retirement are moving from a standpoint of making money to distributing it. This move comes with a significant change in how you manage your money and how you handle the transition.

Managing your money is one of the aspects a good transition plan needs to address. This plan makes use of strategies that create stable retirement funds. One recommended strategy would be maximizing your retirement account withdrawals while eliminating the chances of nest egg depletion. This enables you to cover the costs of essentials like food, housing, and clothing, and some non-essentials like hobbies, entertainment, travel, and other activities that add to your quality of life. An ideal retirement income strategy can also help you accumulate assets that you can use for investments that can help you increase your standard of living.

You can choose from either of two paths: a financial plan based on your portfolio, and another that follows a more long-term goal that identifies your goals in terms of the costs of essentials and "discretionary" expenses. The first method involves building your portfolio with products that pay a certain percentage, once you've determined the annual growth rate and income you need. The second method involves listing down your projected expenses, and following a set of withdrawal policies you've established to ensure that you'll be able to afford these expenses without depleting your nest egg.

Transitioning into retirement can be stressful in the emotional and financial sense - this makes a good financial plan essential, as it decreases or eliminates financial strain and lessens the emotional stress usually present with such a drastic change. You can build a plan based on a percentage of your portfolio, or exercise withdrawal policies you've made based on how much you have and how much you can spend.

by: Carina Smith

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