Develop a plan to spend down your assets. Retirees need a plan for how they will convert their retirement savings into a stream of income that will pay their monthly bills. "You want to be careful not to take too much from your savings too early in retirement," says Joan Gagnon, a certified financial planner for Gagnon Wealth Management in Mansfield, Mass. "You want to have a plan about where to take your assets from and try to stay within the plan." Remember to factor in the income tax that will be due on traditional 401(k) and IRA withdrawals. "If all your money is in a 401(k) or IRA, if you want to spend $100, $30 of that may go to Uncle Sam first, and you only have $70 to spend," cautions Brezik. "You should have funds saved and accumulated outside of those types of accounts to avoid spending a lot of money on taxes."
Don't forget to take required minimum distributions. After you turn age 70½, you will be required to take annual withdrawals from your traditional 401(k) and IRA accounts. The penalty for failing to take these distributions is a stiff 50 percent penalty on the amount that should have been withdrawn.
[Read: 10 Ways to Get Ready for Retirement in 2013.]
Consider maintaining your connection to the workforce. Some retirees find they miss many of the friends and daily challenges they encountered in the workplace. If you continue to enjoy some aspects of your job, consider shifting to part-time or consulting work instead of pursuing a full-time life of leisure. "Keep an open mind and don't burn any bridges," says Oliver. "Plenty of people think they are ready for retirement, and retire and find that they really enjoy working and at least want to keep working on a part-time basis."
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