There is nothing simple about retirement. Everyone has a different path and a unique set of circumstances to face. But, there are some basic decisions that must be made. While I don't suggest this list covers all the issues you may face, it is a good start. If you can answer these questions you are well on your way to a successful retirement.
When do I want to stop working ? A goal without a timetable is simply a wish list. You don't need to pick the exact day at some point in the future. But, you do need to commit to something: late spring of 2012 is fine. Now you know where the finish line is. Develop plans that work backward from that time. For example, 1 month before I retire I will firm up any financial issues with my employer. 4 months before my "Freedom Date" I will begin gathering information about additional health care options. You get the idea. With a goal line in mind, work in reverse toward today.
Is my financial house in order? If nothing else the last few years have made many of the "rules" obsolete. Even the wisdom of owning your own home is up for review by many. What this means is a fresh look at all parts of your financial plan before you turn in that letter of resignation. Is the 6% annual rate of growth you were counting on realistic anymore? Is there a chance Social Security payments will be means-tested in the future? Are muni bonds still safe investments when cities face bankruptcy?
How is my health and my health coverage? Both will have an important impact on your life. Do you have health challenges now that might limit you in some significant way? Does your spouse have a disease that is chronic? How about your insurance? Do you keep full coverage after you stop working? Can you afford Medicare Part D or supplemental coverage? If you need to buy a new policy will anyone sell you one at a rate you can afford? Personally, I think the costs and direction of our health care system will have a bigger impact on retirees than anything else on the horizon.
Do I want to work after retirement? After you finish the financial review, the question may be do I have to work after retirement? But, let's assume that isn't the situation. For many of us work has been how we defined ourselves. Leaving all that behind may be very tough for you. Maybe this will be the perfect time to start your own business. Part time work is a viable option for many. Extra income, staying in touch with people, and feeling needed are reasons often cited why part time work is attractive.
Where do I want to live? This is a biggie. I strongly urge you to not make a move soon after you retire. There is too much upheaval in your life as it is. A move away from friends, family, and the familiarity of the area should not be undertaken lightly. You may be sick of winter and snow. Your grown children and grandchildren may live quite a distance from you. Throwing away your winter coat sounds heavenly. Being closer to the kids would be wonderful. You may be absolutely right. But, being far from everything that gives you roots has its own costs. If possible, spend time as a long-term visitor in the new locale before giving up everything at your former home. Don't rush this decision. It will have a major impact on your happiness and health.
What will I do to stay busy and motivated? It is the rare person who can answer this question with much assuredness before retiring. You will have ideas and wishes. But, until actually living the life you won't really know what might unfold. My suggestion is to make plans. Get excited about doing the things you have not done during your working years. Then, remain flexible. Be prepared to make corrections in your direction. Be OK with deciding one thing you thought you'd love isn't the answer, but something new you just discovered may be.
Just six steps to a simplified retirement? Not really. It is more involved than that. But, these questions are at the heart of the process. If you feel comfortable with your answers I'd suggest you are well on your way toward a successful transition.