This is not an easy question to answer.  When considering retirement there are items that need to be addressed such as financial stability, taxes and what you’re really going to do when you grow up.  There is no definitive age as to when a person should retire, so perhaps a better title to this post could be, “When should I PREPARE for retirement?”  The answer to that question is very easy.  Preparation for retirement needs to start today.  You may choose to continue to work, but planning now will ensure that retirement occurs on your terms.
Change isn’t easy and retirement is a massive change from what you’re used to.  

We don’t fear the unknown; we fear loss of the known.  

I have witnessed many of my clients struggle with the idea of retirement (let alone how to manage the finances) and I hope at the minimum this post will get you to think about what retirement can mean.
Here are the steps that need to be taken to help you be as prepared as possible:
Financial Stability 
For most of us, in our professional lives we were paid some kind of working wages from an employer.  We then built a lifestyle that could be supported by those wages.  In retirement, you’re going to be paid by the government in the form of social security (click here to enroll yourself in my social security class), maybe by an old employer in the form of a pension, and by yourself by converting the assets you have saved to income.  Converting assets into income can be tricky.  You are welcome to schedule an appointment with our office to learn how we can convert the assets you have accumulated into sustainable retirement income.
Every dollar you save in taxes is a dollar going in your own pocket.  Retirement planning is very different than the type of planning you may have done in the accumulation phase of your life.  Understanding the sources of your income and the tax ramifications of that income can save tax dollars.  For example, if you are married with income in excess of $44,000 from wages, dividends, capital gains, and tax-free municipal bonds, up to 85% of your social security could become taxable.  However, Roth IRA income as well as income derived from a life insurance policy will not cause your social security to become taxable.  You could save yourself tax dollars by controlling your sources of income.
The Next Stage
Taking the time now to think about what you are going to do in retirement can be one of the biggest hurdles.  Make sure you are retiring to something you want versus waiting and retiring from something you were unhappy with.  Travel can be fun.  Spending time with your children and grandchildren can be important.  Volunteering for causes important to you can be very rewarding.  The possibilities are endless.  If you are married, please engage in an open dialog.  I have seen couples that never talked about retirement and learned they had two very different views of what they envisioned for the future.
Please call our office at (480) 428-8005 if you would like to discuss your potential retirement.  Thanks for reading and happy retirement.

Written by Marc Montini, IAR, and Managing Partner of Montini & Co Tax Advisory Group.