Stage 5: The Transition Years in life : (65-75)yrs
Things that happen at this stage:
- By this stage, you most likely are retired. You enter the transition years living on income from a post-retirement job and /or from your company pension and Social Security.
- As you move through the transition years, you come to really less on that post-retirement job, and more on the money you have started taking out of your retirement savings plans.
- These are good years for most people. Health is generally good and many people do the traveling they never had time to do during the earlier stages.
Potential trouble Spots:
- You see retirement as a time for cutting loose, so you start spending your nest egg far faster than you should. Before you know it, you have drawn down your retirement savings far below where they should be at this stage.
- Because you are allowed a lump sum distribution from company pension plan, you take the money and run-instead of rolling it over into an IRA to keep it tax sheltered. Resist the temptation to use that lump sum distribution as found money to be blown on a cruise or a fancy SUV.
- You become a hyper cautious investor forgetting that the money in your retirement savings accounts must be able to hold up against inflation for 20 or 30 yrs more.
- You forget how critical it is to remain physically and mentally fit in retirement, so you let your guard down and develop physical ailments or fall into a serious depression.
- Taking early retirement without investigating how much you lose in pension and other benefits by not staying until the normal retirement age.
Insuring at younger age would help you to save a good amount of Corpus fund for Pension. You can start a Pension plan before 40 years or opt for immediate pension plan for life time guaranteed monthly returns.