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The retirement decision: What to think about

Al Kingan, JD, LLM, CLU, ChFC

Posted on May 22, 2023

Estate and business planning expert for MassMutual.
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Note the importance of a budget to gauge potential sources of retirement income against likely expenses.

Review the deadlines and decisions involved with Medicare and Social Security.

Point out the social and emotional factors that arise when shifting into retirement.
Whether you’ve had a date in mind for years, or you’ve just recently decided that it’s probably time, there are many considerations and plans that should be made before you finally work your last day. What retirement will look like for you will depend on a number of factors, including your finances, your social structures, and your health.

While not comprehensive, let’s look at a few issues for consideration.


Before you start planning that worldwide cruise or the second home in a warmer climate, it is crucial to prepare a comprehensive budget.

You will initially want to determine your potential sources of income.

  • You can get an accurate estimate of your Social Security benefits from the Social Security Administration at
  • Do you have any pensions or annuities that will provide a regular payment?
  • If you have a 401(k) retirement account or other investment savings, it would be prudent to work with a financial professional to discuss a strategy for obtaining income from the account that will last for your lifetime. These options may include the purchase of an annuity contract with some of the funds. (Learn more: Does an annuity fit your retirement goals?)

The estimated spending portion of your budget should be projected out for a number of years into the future, especially if you have significant expenses that will change over time.

For example:

  • You may continue to retain your current low interest rate mortgage rather than paying it off early; you will, however, want to factor in that the mortgage payments will cease upon your payoff date. (Related: Pros and cons of mortgages in retirement)
  • You may have pent-up demand for travel or other activities now that you will have available time. These expenses should be factored into your budget.
  • Your budget should also factor in rising expenses due to future inflation.
  • Do you plan to work part-time, maybe doing something related to your current job, education, or a hobby? Then explore whether you can secure such a job or whether your hobby is likely to cover your expenses. Include the income and potential expenses in your budget.


You are eligible for Medicare at age 65. Your enrollment window is three months before the month you turn 65 to three months after, unless you had qualifying coverage after attaining age 65.

Without qualifying coverage, failing to enroll in Medicare during this time will subject you to additional premiums for life. You will want to do some research to determine whether you intend to accept Medicare Part D, enroll in a Medicare Supplement plan, or sign up with a Medicare Advantage (Part C) plan. There are many factors to consider when making this determination.

If you’re retiring before you’re eligible for Medicare or your spouse isn’t covered by an employer plan or eligible for Medicare, you need to explore other options for health insurance coverage.

Social Security

You can apply for retirement benefits up to four months before you want to start receiving them. You can begin taking benefits as early as age 62. But beginning benefits before your full retirement age will cause you to have actuarially reduced benefits.

The full retirement age is 66 if you were born from 1943 to 1954. The full retirement age gradually increases each year if you were born from 1955 through 1959. For anyone born in 1960 or later, full retirement benefits are payable at age 67.

And keep in mind that delaying the start of benefits beyond the full retirement age results in an 8 percent increase in your monthly payments for every year that you delay your start date until you’re 70. (Related: When should I file for Social Security benefits?)

Choosing when to begin taking benefits can be very complex. Many financial professionals specialize in providing customized Social Security analytics.

Social aspects of retirement

Retirement can be an adjustment for everyone in your household and can potentially affect your other family and friends. They may have different ideas of what your retirement will look like.

Our research with retirees over the years has suggested that those who experienced the most satisfaction and well-being in their retirement were those who made plans and goals, and especially with those whose health and financial situation permitted them to actively pursue those plans and goals.

What will you do in retirement?

Part of your retirement planning should involve what your day-to-day life will look like. Think about your current routines, both while working and outside of work.

  • What do you enjoy?
  • What gives you personal satisfaction and contributes to your sense of purpose and identity?
  • What have you wanted to do but didn’t have time or resources to do till now?

Have you discussed your plans with your spouse or significant other, and any other family members who might be affected? Do your plans fit with theirs? (Related: How to emotionally prepare for retirement with your spouse)

Stress can occur when one family member retires while another continues to work. The retiree may feel frustrated because plans are put on hold while their partner continues to work full time. Finding fulfilling hobbies or volunteer opportunities becomes crucial to finding satisfaction.

Where should I live?

There are a number of questions and issues to consider when thinking about the location of your retirement.

  • Will you continue to live in the same home, or should you consider downsizing and moving into a residence that requires less upkeep and maintenance?
  • Should you move closer to your children and grandchildren?
  • Should you relocate to a warmer climate, possibly to a state with reduced income taxes on your retirement income?
  • Can you reduce your cost of living by relocating?
  • Would you ever consider moving in with one of your children?

These are all relevant issues that retirees and soon-to-be retirees should think about. And the answer is different for everyone.

Declining health

Unfortunately, declining health, whether your own or your partner’s, is eventually inevitable. Declining health has a two-prong effect.

  • Your activity level and spending on those activities will be reduced.
  • At the same time, a greater share of your budget will be devoted to health care.

This inevitability leads many retirees to overspend in their healthier retirement years in an effort to get as much out of life as possible. Your financial professional should be able to help you in planning the seasons of your retirement. (Learn more: How much will I really need for health care in retirement?)


Regardless of your financial situation entering into your retirement years, adequate budgeting, life planning, and financial advice will go far in reducing your stress and anxiety and increasing the chances of experiencing a fulfilling stage of life.

Discover more from MassMutual …

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What to do one year before retirement checklist

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The information provided is not written or intended as specific tax or legal advice. MassMutual, its employees and representatives are not authorized to give tax or legal advice. You are encouraged to seek advice from your own tax or legal counsel. Opinions expressed by those interviewed are their own and do not necessarily represent the views of Massachusetts Mutual Life Insurance Company.