Preparing for a Smooth Exit

Create a game plan to make the transition to retirement easier.

Take the time to ponder your retirement in advance and you won't feel rushed into making last-minute decisions when it's time to quit. The sooner you start planning, the easier it will be to make financial adjustments, if necessary.

How will you spend your time? Do you plan to travel, or will you take up a new, less-expensive hobby close to home? Your goals will affect your income needs in retirement. In general, it's safe to assume you'll need about 85% of your pre-retirement income. If you pay off your mortgage, you might need less. If you travel overseas or need to buy your own health insurance, you might need more.

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Mary Beth Franklin
Former Senior Editor, Kiplinger's Personal Finance