Jan-Feb-2015-TT-for-Website

Finance
MICHAEL COLE
Making a Seamless Transition to Early Retirement
The transition from working to retiring requires
tremendous preparation – and leaving your job
sooner than expected can present additional challenges.
We thought you might appreciate this article,
which offers some useful information about staying on
track toward your original financial goals even when
retiring early.
Now that you are about to retire, your goals around retirement
assets are naturally changing. You are moving
from the “accumulation phase” into the “distribution
phase,” which means you will be taking withdrawals
from your retirement accounts, probably for the first
time.
However, retirement does not
mean you must – or should – stop
growing your assets. It does mean
you should balance long-term
growth with your income needs.
Below is an overview about moving the accumulation
phase to the distribution phase.
Take Stock of Where You Stand
Think about what you want for yourself as you stand on
the brink of this big change. Decide if your retirement
is permanent or simply a break before starting the next
phase of your life. For many people, “retiring” really
means transitioning to part-time work, consulting,
freelancing or even starting a new career in an entirely
different profession. If you do continue working,
recognize that your post-retirement earnings are likely
much lower than your previous compensation. And of
course, your choice will be closely tied to the assets
you have accumulated, your health, your age and your
spouse’s wishes.
To fully prepare, it is smart to review your liabilities and
spending. Consider completing a budget worksheet
that outlines your core fixed expenses (needs) as well
as variable, lifestyle or luxury items (wants and wishes),
to gain a better understanding of your cash flow
needs. Do your best to pay off as much debt as possible
before you retire and avoid high-interest debt, particularly
credit card debt. If you have a short window of
employment before you retire, take advantage of it to
refinance any outstanding mortgages at lower rates.
Once you retire, it will be harder to do so.
If you retire before age 65 and cannot obtain health
coverage through a spouse or domestic partner, you
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This article was provided by Michael Cole, Vice President Investments, Wealth Strategy Associate for UBS Financial Services,
Inc. in Sioux Falls, South Dakota. This article has been written and provided by UBS Financial Services Inc. for use by its
Financial Advisors.
54 TOWER TIMES JANUARY ■ FEBRUARY 2015