Ready, Set, Retire

From Kiplinger.com, September 2007

You're at the top of your game, the peak of your career, and you're making more money than you've ever made. Now is the perfect time to think about quitting.

Say what? It's true. The five-to-ten-year period before you retire is the time to assess your retirement preparations to see whether they're realistic. And if you're falling shy of your goals, you still have time to make adjustments.

David Zeigler is living proof that preparation is key and the payoff is sweet. "Retirement is great," says Zeigler, 61, who spends his days playing tennis or ice hockey, volunteering with Meals on Wheels, catching up on his reading, and working on household projects at his home in McLean, Va.

Zeigler retired earlier this year after nearly 44 years at the U.S. Department of Labor. But he started thinking seriously about making the break seven years ago, after he attended a four-day, government-sponsored seminar on retirement that covered everything from investments and health care to how to spend your extra time. "It was a catalyst for me," says Zeigler.

His wife, Melody Sands, expects to retire next year after 31 years as a federal-government employee. By then, their youngest son, Luc, will have graduated from college, and they'll be close to paying off their mortgage. Like many dual-career couples, Zeigler and Sands did not plan retirement as a simultaneous event. "I wanted David to have at least a year by himself," says Sands, 55. But she's eager to join him so they can travel and enjoy life without the daily grind. And with college bills behind them and two pensions, retiree health benefits, personal savings and a paid-off mortgage, they have a lot to look forward to. "This is the payoff," says Zeigler. "But if you're not financially prepared, you may not be nearly as happy."

The federal government has been offering retirement-transition seminars to employees for years. Now, corporate America is waking up to the fact that as workers shoulder more of the burden of providing for retirement, they need more help figuring out how to do it.

IBM, the venerable U.S. company once synonymous with career-to-grave employee benefits, is on the leading edge of this new trend. Times have changed, and so has Big Blue. In conjunction with its decision to freeze its traditional pension and cash-balance plans and move to a 401(k)-only strategy next year, IBM recently launched an innovative Money Smart educational program to help employees make the transition from work to retirement. The program offers comprehensive preretirement seminars, presented on site during business hours, that cover all the moving parts of a 21st-century retirement, including how to estimate future expenses and decide on an appropriate withdrawal strategy to make your savings last a lifetime.

Seminar leaders also discuss Social Security options and what to do about health coverage before Medicare kicks in at age 65. (IBM no longer guarantees health benefits for life, but it gives retirees an account based on their years of service after age 40 -- often worth $40,000 or more -- to pay for health insurance and other medical expenses. Once the money is gone, retirees are on their own.)

The seminar was an eye-opener for Bill Wiktor, 55, an IBM project manager in Rochester, Minn. "It made it clear to all employees that you have to take responsibility for your own retirement," says Wiktor. "You're not going to reach your goal unless you have a plan."

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