4 Must Dos for Making the Transition from Work to Retirement

You may find it hard to believe but retirement can mess with your mind. The transition out of working life to our hard-won retirement freedom can be a bumpy ride. We leave behind the only life we have known where we earn income through working and save for our retirement future. We set into motion our plan for this milestone, pull the trigger, and all of a sudden everything changes. Here are 4 Must Dos for Making the Transition from Work to Retirement to maximize your chances for a smoother path to early retirement bliss.

Maximizing Your Chances for a Smooth Transition from Work to Retirement

#1- Establish your retirement income plan before you retire

If you are retiring with a Pension and/or Social Security and it covers all of your expenses then your income plan is for the most part covered. But many folks retire needing more income than even their Pension and/or Social Security will provide.  Then there are others like me who retire earlier than Social Security age and without having a monthly pension check. Creating a retirement income plan from our portfolio is a very important part of our transition from work to retirement.

Figure Out Your Portfolio Withdrawal Strategy  

 There are many ways to handle this. First off, depending on your portfolio and your age at retirement, you may have retirement account early withdrawal penalty rules to work around.

If your portfolio generates enough passive income in dividends and interest then you have an easy target for harvesting retirement income. If you don’t and will need to occasionally sell assets to meet your income needs then develop your portfolio rebalancing strategy to know which assets to sell.

All of this should be done within the safe withdrawal rate guidelines. For example there is the 4% safe withdrawal strategy and Bucket strategies to consider. This may be an area where you want to consider getting professional advice.

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