Great Expectations

Today, 51 percent of Americans aged 60 to 64 remain in the workforce.¹ For these and other Americans, retirement doesn't mean slowing down. But from modifications in schedules, lifestyle, and income, retirement almost always brings change.

Retirement is something that many people look forward to reaching, but it can have its challenges. Research shows that couples, in particular, may face difficulties when transitioning to retirement as they adjust to new roles and routines.² Adjustments in spending and saving habits may also be required as couples move from earned income to retirement income.

The decisions you make to manage your assets during retirement will determine the type of lifestyle you will enjoy. Taking time now to discuss your retirement aspirations and plans can help you make better decisions for the future.

Timing
One important decision is when you will stop working. For married couples in two-career households, this decision should be considered jointly. Will both spouses stop working at the same time? Will one or both spouses continue to work to provide income? How you respond to these questions may affect when you start tapping into your retirement assets for income. Remember that withdrawals from tax-deferred retirement accounts are typically taxed as ordinary income
and, if taken prior to reaching age 59½, may be subject
to an additional 10 percent federal income tax penalty.

Spending Habits
Do you expect to spend more or less money during retirement? Do you envision spending your retirement traveling or spending more time at home? Your answers to these questions will help determine how much income you will need in your later years, which should factor into the financial decisions you make today.

Investing
Have you developed an investment plan to help support the retirement lifestyle you desire? If you have successfully accumulated a retirement nest egg that will support your desired lifestyle, you will want an investment strategy that will help your assets last and provide you with a steady income stream.

Whether you are about to retire or are already retired, preparation and communication can help you make the most of your retirement years. Careful planning and decision making now may result in the retirement you have always envisioned.

1) CNNMoney, August 30, 2004
2) The Wall Street Journal, February 14, 2005