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Readers and friends often ask me about the retirement decision-making “process.” How do you prepare, a year out, 6 months out, 3 months out? Do you need a written plan in advance? What about contingencies? Do you just pull the plug, or is there a more systematic way? When is it really safe to leave?

I’d be stretching the truth to say that I followed a meticulous, step-by-step approach to my own early retirement. Yes there were benchmarks and milestones that I observed. There were critical tasks I knew I had to check off. But at the time it wasn’t a perfectly integrated process.

Now, in retrospect, I can see that it was all about answering a half-dozen key questions. So, here they are for your benefit in thinking through the biggest financial decision of the rest of your life….

1. How much does it cost me to live?

Go to any professional financial advisor for a retirement plan, and the first thing they’re likely to hand you is a questionnaire about your living expenses. Unless you’re fantastically wealthy, it’s simply impossible to prepare for retirement without knowing how much it will cost you to live each month. That number will dictate the required size of your nest egg, and will figure in how you should allocate and draw down your assets.

Though it’s not strictly necessary, I strongly preferred to have my major life expenses behind me before I got serious about retirement. That meant no debt of any kind. Our house had been paid off for years. But my son was partway through college. And, it wasn’t until he had reached a point that I could predict education expenses for the remaining years, that I was ready to pull the plug on my own full time career.

More reading: Our Retirement Expenses: Where Does the Money Go?

2. How will I get health care?

When I retired in 2011, and for many years before that, it was extremely difficult to claim your freedom before full retirement age for this simple reason: health insurance wasn’t available at reasonable cost! Unless you were one of the fortunate few who had worked for the government or a very large corporation, retiree health benefits were nonexistent. I worked in small business or as a consultant most of my professional life, and the options were grim. You might scrape by on COBRA for 18 months, then convert that into an individual policy at exorbitant cost, but only if your health and the insurance companies cooperated. Fortunately, my wife had retirement health care benefits through her public school teacher position.

Now, Obamacare has changed the landscape for health care both pre- and post- retirement. But it has not perfectly simplified your choices, nor made them affordable in all cases. You’d still be well advised to explore and confirm your health care options carefully before burning any bridges behind you on the way to retirement. And you’ll have to keep one eye on the courts and the political environment to guess whether Obamacare will survive in its current form or not.

More reading: A Guide to Retirement Health Care – How Will YOU Get It?, Shopping Obamacare: Comparing Plans / Awaiting a Verdict

3. How much do I need to have saved?

This is the retirement question that typically trumps all, though as I’m showing here, there are other important questions. People obsess about this number, and financial advisors are all too happy to indulge their worries with fees for sophisticated retirement plans, updated annually, that supposedly dispel all uncertainty.

The bad news is this simple truth: nobody can predict the future. And the farther off that future, and the more variables involved, the less predictable it gets. That’s retirement planning. The good news is that you can achieve enough certainty to make a decision. I did, and so have many others.

The very simple answer to this question is that you probably need a nest egg between 20-33 times the shortfall between any guaranteed income like Social Security or pensions and your annual expenses. (That’s between a 3% and 5% withdrawal rate.) Where in that range you fall, depends on your age, your views about your future, and your lifestyle flexibility. I recommend comparing results from 3 good retirement calculators to gain more confidence.

More reading: The One Retirement Question You Must Get Right, 10 Tips for More Accurate Retirement Calculations

4. How will I withdraw from my savings?

The second greatest conundrum in all of retirement planning, after how much you need, is probably how do you withdraw from it over the years? There are nearly as many opinions, products, and services as there are pundits, academics, and financial advisors. You can do fixed withdrawals, or variable withdrawals in several different flavors each. You can annuitize: turn the decisions, and the profits, over to an insurance company. You can, if you’re fortunate, just try to preserve capital, living off interest, dividends, growth, and some part-time work. (That’s my current strategy, more or less.)

This topic is a hotbed of research. Maybe that work will eventually produce a safe, simple turnkey retirement income system that we can all trust. Meanwhile, the watchwords “flexible” and “dynamic” keep popping up. Turns out there may not be one, static way to live off your assets in retirement. Rather, a hybrid of existing strategies could be best. And you can’t just set and forget it. You’ve got to revisit your expenses, and your assets, and the state of the world, at least annually. You, or an advisor, must personally “drive” your retirement finances. You can’t just put them on cruise control. Since the rest of life works better this way too, should we be surprised to hear the same about retirement?

More reading: Retirement Withdrawal Strategies

5. What will I do all day?

Most of us who have entered retirement on the early side, with decent health, interested in experiencing and contributing to the life around us, aren’t satisfied with a full-time leisure lifestyle. Yes, it is great to make your own hours, to go on vacation whenever you choose, to catch up on your bucket list and all the things you wanted to do when you were younger. I’ve done a lot of that. But it only goes so far.

It is most helpful to long-term happiness if you can identify some retirement activities that are not only fun and recreational, but also creative, productive, and generous. And it can be smart to test-drive those post-retirement options before you say goodbye to your career.

Some people discover their career is their ongoing passion in life. No shame in that. In fact they are very fortunate, in a way. Either way, best to explore your true calling, before you quit your job!

More reading: What Will You Do When You’re Retired?, Should You Work One More Year?

6. Do I have a backup plan?

The earlier you retire, or the higher your withdrawal rate against your savings, the more potential for dramatic financial changes that could throw you out of any retirement game plan. That change could be good. That has been the case in my early retirement so far: The bull market has continued, we received a modest inheritance, and this blog has thrown off a bit of income. But I don’t take any of this for granted. And neither should any retiree facing decades of life and political and financial uncertainty ahead.

What will you do if your expenses are more than planned, if market returns are lower, if inflation is higher, if Social Security is cut? Could you work, full or part-time, to produce income if needed? (If you choose not to maintain your previous skills and contacts, be certain you won’t have to go back to your old career!) Or, would you have to compensate by adjusting your lifestyle? Typically, the older you are, the less flexibility you have to make adjustments, but also the fewer years you’ll be exposed to potential big financial changes.

In general, coping with any economic stress involves either increasing your income, or reducing your expenses. In traditional retirement, say from your mid-60’s on, the options are limited. On the income side you could annuitize investment assets to increase the effective withdrawal rate, or take out a reverse mortgage if you have untapped home equity. Both of these options reduce your control over your assets. On the expense side you could reduce discretionary spending, or downsize. For many people who are “house poor,” downsizing is among the most effective options.

More reading: The Optimal Mix: How Much Annuity Do You Need?, Transforming Home Equity Into a Better Retirement

Leaving Work

So, you’ve answered these half-dozen crucial retirement questions as best you can. You know your living expenses and how you’ll get health care. You’ve saved enough, and you have a strategy for withdrawing from those savings in retirement. You have a plan for how you’ll spend your time, and a backup plan if there are serious financial surprises.

You’re now ready to disengage and say goodbye to your career. How do you go about that?

My own departure went reasonably smoothly, but not perfectly. Change is never easy. That’s because this is the point where you leave the numbers behind, and deal with human beings.

Most likely you are a valued employee, or you wouldn’t have reached this point in the first place. You want to leave on the best of terms, ideally at the end of a successful project, when your organization is best positioned to deal with replacing you. After all, you’ll remember this transition your entire life, and you don’t want any regrets, if possible.

You start by telling your boss, then your closest colleagues, then the others. If possible, you take a hand in your succession planning, choosing and training those who will replace you. But, at this point, you are forced to admit that you are no longer in control of the process. You’ve chosen to leave, and hand over the reins to those left behind. Accept that. You’ve got an appointment with the rest of your life.

Finally, you say “goodbye,” ideally with some affection and appreciation. Then, you turn around, step forward, and launch into the next stage of your life….