Howard Hook, CPA, CFP, is a retirement distribution planning expert with Access Wealth Planning. the wealth management firm with offices in Roseland and Princeton, New Jersey. He maintains that with the coming shift from employment to retirement, many Baby Boomers will be on their own when it comes to making decisions that could have a major effect on their retirement lifestyles. He points out that in talking to a goodly number of clients who are happily retired as well as counseling those who are thinking about packing it in, he has found that those who have worked through three specific issues prior to departing their full-time jobs have achieved the most post-retirement satisfaction.   So, what are the three things to think about before you hand in your retirement paper?   First of all, do you know how you are going to pay your bills when you are no longer receiving a salary? It seems rather obvious on the surface, but Hook says that many people kind of ignore the matter of how much income will actually be needed without that salary. In other words, it’s not as obvious as it sounds.   He suggests that people should prepare a detailed list of exactly the expenses that are being paid and then a separate column on how much income is being received. He cautions that all expenses should be included. For example, consider income taxes. That’s going to come out of your revenue base; the employer is no longer paying or deducting it from your paycheck.   And consider medical insurance. Who’s paying for that and what’s it cost?   Hook points out that all income must be listed. For instance, consider Social Security. He says that many people don’t realize that a portion of Social Security is subject to federal income tax and that a spouse who is still working can cause up to 85 percent of the retired spouse’s Social Security income to be subject to income tax.   Next, go back to those medical expenses. How you going to pay for them? Upon retirement, decisions and responsibilities will fall on the retiree. A break in coverage could result in extended waiting periods for those with certain pre-existing conditions. You don’t want coverage to lapse even for a moment. One has to consider when Medicare comes into play or if not, what are the options? Also, what about COBRA which requires most employers who offer group health plans to provide temporary continuation of such coverage to employees who do qualify? And what about a spouse’s medical plan at their place of employment for the retiring spouse?   Each medical plan has unique advantages and disadvantages. In fact, some plans require a supplemental drug plan to be purchased to cover prescription medication, while other plans include drug coverage.   And again, watch those waiting periods carefully!   Finally, and perhaps most importantly, how are you going to spend your free time? All this free time certainly changes the parameters of your life. With people living longer, the average retiree could live upwards of 25 years or longer. Do you have a game plan? Keep in mind that in many instances more free time can also lead to increased spending. Having a plan for keeping busy, says Hook, can help ensure a smooth transition and ease the difficulty of managing large blocks of free time. He says that the idea is not to take out a calendar and full out each day with a different planned activity but rather to make a list of the things you would like to do and an approximate time frame for doing them.   Naturally, Hook says that answers to these questions may differ because people are different. The key, he concludes, is to make appropriate decisions now that will allow you the flexibility to adjust those decisions in the future without compromising your lifestyle.   Howard Hook can be reached at

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