By Ade Asefeso MCIPS MBA

Copyright 2015 by Ade Asefeso MCIPS MBA

All rights reserved.

First Edition

ISBN-13: 978-1511909853

ISBN-10: 1511909854

Publisher: AA Global Sourcing Ltd

Website: http://www.aaglobalsourcing.com

Disclaimer

This publication is designed to provide competent and reliable information regarding the subject matter covered. However, it is sold with the understanding that the author and publisher are not engaged in rendering professional advice. The authors and publishers specifically disclaim any liability that is incurred from the use or application of contents of this book.

If you purchased this book without a cover you should be aware that this book may have been stolen property and reported as "unsold and destroyed" to the publisher. In this case neither the author nor the publisher has received any payment for this "stripped book."

Dedication

To my friend Steffen Brygger Lund who seems to have been sent here to teach me something about who I am supposed to be. He have nurtured me, challenged me, and even opposed me…. But at every juncture has taught me!

This book is dedicated to my lovely boys, Thomas, Michael and Karl. Teaching them to manage their finance will give them the lives they deserve. They have taught me more about life, presence, and energy management than anything I have done in my life.

Chapter 1: Introduction

Retirement is the point where a person stops employment completely. A person may also semi-retire by reducing work hours.

An increasing number of individuals are choosing to put off this point of total retirement., by selecting to exist in the emerging state of pre-retirement.

Many people choose to retire when they are eligible for private or public pension benefits, although some are forced to retire when physical conditions no longer allow the person to work any longer (by illness or accident) or as a result of legislation concerning their position. In most countries, the idea of retirement is of recent origin, being introduced during the late 19th and early 20th centuries. Previously, low life expectancy and the absence of pension arrangements meant that most workers continued to work until death. Germany was the first country to introduce retirement, in 1889.

Nowadays most developed countries have systems to provide pensions on retirement in old age, which may be sponsored by employers and or the state. In many poorer countries, support for the old is still mainly provided through the family. Today, retirement with a pension is considered a right of the worker in many societies, and hard ideological, social, cultural and political battles have been fought over whether this is a right. In many western countries this right is mentioned in national constitutions.

A person may retire at whatever age they please; however, a country's tax laws and or state old-age pension rules usually mean that in a given country a certain age is thought of as the standard retirement age.

The standard retirement age varies from country to country but it is generally between 50 and 70. In some countries this age is different for males and females, although this has recently been challenged in some countries (e.g., Austria), and in some countries the ages are being brought into line.

Retirement might coincide with important life changes; a retired worker might move to a new location, for example a retirement community, thereby having less frequent contact with their previous social context and adopting a new lifestyle. Often retirees volunteer for charities and other community organizations. Tourism is a common marker of retirement and for some becomes a way of life, such as for so-called grey nomads. Some retired people even choose to go and live in warmer climates in what is known as retirement migration.

It has been found that Americans and Europeans have six lifestyle choices as they age.

Continuing to work full-time.

Continuing to work part-time

Retiring from work and becoming engaged in a variety of leisure activities

Retiring from work and becoming involved in a variety of recreational and leisure activities

Retiring from work and later returning to work part-time

Retiring from work and later returning to work full-time.

An important note to make from these lifestyle definitions are that four of the six involve working. America and Europe are facing an important demographic change in that the Baby Boomer generation is now reaching retirement age. This poses two challenges; whether there will be a sufficient number of skilled workers in the work force, and whether the current pension programs will be sufficient to support the growing number of retired people. The reasons that some people choose to never retire, or to return to work after retiring include not only the difficulty of planning for retirement but also wages and fringe benefits, expenditure of physical and mental energy, production of goods and services, social interaction, and social status may interact to influence an individual's work force participation decision.

Often retirees are called upon to care for grandchildren and occasionally aged parents. For many it gives them more time to devote to a hobby or sport such as golf or sailing. On the other hand, many retirees feel restless and suffer from depression as a result of their new situation. Although it is not scientifically possible to directly show that retirement either causes or contributes to depression, the newly retired are one of the most vulnerable societal groups when it comes to depression most likely due to confluence of increasing age and deteriorating health status. Retirement coincides with deterioration of one's health that correlates with increasing age and this likely plays a major role in increased rates of depression in retirees. Longitudinal and cross-sectional studies have shown that healthy elderly and retired people are as happy or happier and have an equal quality of life as they age as compared to younger employed adults, therefore retirement in and of itself is not likely to contribute to development of depression.

Many people in the later years of their lives, due to failing health, require assistance, sometimes in extremely expensive treatments; in some countries being provided in a nursing home. Those who need care, but are not in need of constant assistance, may choose to live in a retirement home.

Chapter 2: The 5 Types of People Who Never Retire

"I actually think the whole concept of retirement is a bit stupid, so yes, I do want to do something else. There is this strange thing that just because chronologically on a Friday night you have reached a certain age… with all that experience, how can it be that on a Monday morning, you are useless?" — Stuart Rose, former executive chairman of the British retailer Marks & Spencer

What springs to mind when you think about retirement?

I wistfully think about sleeping in and not using a time clock (which I despise). But for other people, the word "retirement" causes shudders.

In this chapter we will consider these five categories of people who will never retire. Are you among them?

1. The Broke Non-Retiree.

Personally, I find this the most unsettling scenario. Whether due to poor financial planning or heavier-than-anticipated financial needs, more and more older workers continue to find themselves in the labour pool. According to the Centre for Public Affairs Research, a 2014 survey of people 50 and older revealed that a startling 47 percent now plan to retire at a later age they expected when they were 40. The survey also found that 39 percent of workers age 50 and older report having $100,000 or less saved for retirement, not including pensions or homes; 24 percent have less than 10,000.

Maybe it's time to take stock of your financial future by estimating your retirement expenses.

2. The Workaholic

There is a difference between the person who enjoys work and does so with enthusiasm and the person whose life is out of balance and cannot stop working. Perhaps you have run across some of the latter in your work, too. Workaholics have difficulty transitioning from work to retirement life, because so much of their identity, social network, and purpose is tied to their career. They can feel adrift in retirement without the structure work provides.

When working is almost an addiction, it can be devastating to face retirement. One of my former colleague springs to mind. Although qualified to retire for years, he fought it tooth and nail, taking work home and working weekends. Even when finally convinced by management that it was time for him to step down, he would find excuses to drop by the office or call people to have lunch.

If you recognize yourself in this description, there is help available. Consider support groups, such as Workaholics Anonymous, which aim to help workaholics develop coping skills and the ability to relax during downtime.

3. The Successful Investor

You may know some people in this category. They bought rental real estate, years ago, and now are landlords. Or perhaps they bought silver or gold, or learned how to effectively invest in the stock market. There is a common thread here. They got moving, educated themselves, and by their 50s, were enjoying a leisurely lifestyle.

But that doesn't mean they want to (or can) stop. Many keep at it, repairing their rentals, or checking their investments every day. They have made being a successful investor their life's work and feel no need to "retire" from it.

4. The Life Re-inventor

Starting a new career later in life can be an invigorating way to reinvent yourself.

My friend Andrea, a former diplomat, began working with the mentally ill, eventually started teaching classes, and she is now co-authoring a book. She finds it tremendously rewarding and has learned a lot of new things. Her husband, an engineer, always wanted to be a teacher, so he started volunteering at a school. He was so successful at tutoring, he was shortly offered a paying position.

For my friends, the career switch was fairly easy; however, you certainly wouldn't want to quit your present job and jump into something new without doing some research and soul-searching.

Will your new career help fulfil life ambitions? Will it offer a large enough pay cheque to make the switch and time investment worthwhile?

5. The Mega-Successful Lifer

Consider the lives of the truly, astoundingly successful. For mega-successful CEOs or famous actors, the demand for their talents is so high, there is less incentive for them to quit working.

According to a study by Merrill Lynch and Age Wave, the desire to keep working until the last day is common to over 60 percent of the wealthy. But you don't have to be filthy rich or famous for this to be true of you, too.

Evidence also suggests that many people who are successful in more realistic endeavours such as artists, small business owners or physicians also feel the incentive to continue using their talents until the very last day. Will you?

Chapter 3: Jobs You Didn't Know You Could Do in Retirement

Become a voiceover artist, life-cycle celebrant or senior move manager. It can be fun, part-time (and lucrative!) work.

Doing voice-over for commercials, documentaries, and books can be a second career. Does the thought of working in retirement have you bummed that you will be stuck doing a boring, low-level job? If so, it's time to update your thinking.

As a career business coach, venture capitalist and author of various business books, I have found that there are a growing number of fun and unconventional options for part-time work in retirement. They can pay pretty well, too.

Here are three you may want to consider:

1. Voiceover Professional

The job: Acting is a notoriously difficult field to make a living, especially for people over 50, but voiceover work is one segment of the business where age doesn't work against you.

Voiceover actors record the audio tracks used in everything from training videos to audio books to TV commercials. While most of the lucrative television and movie voiceover work takes place in Los Angeles and New York, you can find assignments with corporations, nonprofits and small businesses practically anywhere.

Many voiceover artists work from home studios, using their personal computers and low-cost recording equipment purchased for as little as a few hundred dollars.

A good friend of mine, a voiceover professional I used to narrate some of my books, says "you will need to refine your skills and educate yourself about the business before hanging out a shingle".

Income potential: The amount you can earn doing voiceover work ranges considerably. Your first gigs might be unpaid while you are learning the ropes. After that, you could potentially earn a few hundred dollars for each small business piece to thousands of dollars for a national television commercial (movie voiceovers can pay tens of thousands, but those jobs go to people with loads of experience). Rates are highest for union jobs done by members of the Screen Actors Guild-American Federation of Television and Radio Artists Union (SAG-AFTRA).

How to get started: Many continuing education programs offer low-cost classes for people interested in learning about the voiceover industry. You can also find inexpensive online classes at The Learning Annex and Edge Studio.

2. Life-Cycle Celebrant

The job: Never heard of a life-cycle celebrant? It's someone who helps people commemorate important life transitions, like a wedding, divorce, adoption, the loss of a beloved pet or the end of a difficult illness. You work together crafting a highly personalized ceremony reflecting your client's values, heritage, beliefs and, if desired, religious customs.

The demand for life-cycle celebrants is expected to grow, especially because interethnic and interfaith marriages are on the rise and couples are looking for ways to hold meaningful ceremonies outside the confines of traditional religious institutions.

While there is no formal license or certification needed to perform most life-cycle events, you need state sanctioning to legally marry couples. The website U.S. Marriage Laws has a state-by-state rundown on who can perform marriages, but it's a good idea to check with your local marriage license office.

Income potential: Celebrants can earn from a few hundred dollars for officiating at a simple ceremony to more than $1,000 for one requiring extensive research and writing services.

How to get started: To learn more about becoming a celebrant, check out the website of the Celebrant Foundation and Institute, which offers online training programs.

3. Senior Move Manager

The job: Moving can be an especially difficult and painful transition for the elderly. But senior move managers (I'm not wild about the word "senior" either, but that is what they are called) make things easier by assisting clients who need to downsize and relocate.

This is actually a business where your older age will work in your favour. 75 percent of members of the National Association of Senior Move Managers are 50 or older. As Beth Chapman, who runs the senior move business Extra Daughters on Cope Cod, Mass., once said. "At age 68, I am a comfort to other people precisely because I am not a kid."

A senior move manager's services include organizing household belongings, disposing and arranging for the sale of items, packing and unpacking boxes, planning the client's new home space and assistance with decorating.

Senior move managers can also help develop "aging in place" plans for older people who wish to remain in their own homes but need help streamlining their possessions and organizing their space (even though this is more like the opposite of a "move"). They can consult with other specialists regarding necessary renovations and installations for a home.

Income potential: Senior move managers charge on an hourly or project basis. Rates range from $25 an hour for basic packing services to $100 or more an hour for extensive consulting services. Many senior move managers attract business by working with places where older people may move, like assisted living facilities and senior residence communities.

How to get started: Visit the website of the National Association of Senior Move Managers and stop by local senior living facilities to see if you can help relocate people who are planning to move in. Your initiative could bring you some much-needed retirement income.

Chapter 4: Managing the Transition to Retirement

Individuals respond to retirement in many different ways. One person may respond to the question of retirement by saying, "I can't wait," while another person at the same institution working with the same people in the same position might say, "I hope I never have to retire." What is it that causes people to have such differing responses?

As a recent retiree, I have discovered that there is not a simple answer, nor is there "a one size fits all" way to manage this transition.

Most retirement planning addresses the financial aspect, but equally important are the emotional and psychological pieces. This chapter will identify the key phases in the transition to retirement, suggest resources for those considering retirement, and share recommendations from my personal retirement transition journey.

There are 3 commonalities in transitions. The first phase is an ending, followed by the neutral zone which may be a period of confusion and distress, which then leads to a new beginning.

The ending phase has multiple characteristics and issues. People in this phase are beginning to disengage from activities that once had high priority, to lose their identity with a role that was once very important, to feel that things are no longer what they seem to be, and to feel lost. There is no particular order to the above phases, but they lead to the neutral zone.

Based on the individual, the neutral phase may last days, weeks or months. People in this phase often wonder what is wrong with them, feel reluctant to discuss their feelings with others, find themselves being inactive and passive, and spend a great deal of time reflecting on what is really important. This time of inner reorientation can lead to a new beginning.

The new beginning phase starts within and will not take place until the individual is ready. When a person can identify his or her passions and deep longings, then powerful motivation occurs and helps move the person to a new place.

For some, these phases occur sequentially; others may move back and forth through these phases several times, and some even get stuck in the first or second phase and never move to a new beginning.

These three stages is called; "Moving Out, Letting Go; Moving Through, Searching; and Moving In, Creating a New Life." Since the work environment provides many opportunities to have various social and psychological needs met, we identifies some key questions that need careful consideration in retirement planning.

1. Who am I? How do I feel about establishing a new identity?

2. To whom will I "matter"? Who will make me feel noticed, appreciated, and needed?

3. What gives meaning to my life? What do I value and makes me feel fulfilled?

4. With whom will I interact and socialize on a regular basis? Where will I feel a sense of community and belonging?

5. How will I spend my time? Do I have enough structure, routine, and activities to fill my day, both short and long term?

6. How do I feel about income change or not receiving a pay cheque? Will I have enough income to do the things that are important to me?

7. What is my physical health? How will this impact my options?

Just as there are no right answers to the above questions, there is no right way to transition into this new phase of your life; however, through our research we identified five different models that describe how many people craft this stage of their lives.

1. Continuers: These people continue to be involved in some of their previous activities, but often package them in different ways.

2. Adventurers: Individuals who start new endeavours, learn new skills, and organize their time and space in new ways are in this group.

3. Searchers: Trying out new options, learning through trial and error, stopping and starting over are characteristics of these people.

4. Easy Gliders: Going with the flow and being open to anything is a way to describe those with this approach.

5. Retreaters: People with this approach may be disengaging from life and giving up.

Some people take one of the above approaches and continue that throughout their lives. Most people are combinations of the above, although with a continuing dominant approach. At varying times in retirement there is movement back and forth through several of the models.

In reflecting on these important issues and my personal experiences as an adventurer and searcher in retirement; here are some recommendations for those considering retirement transition.

1. Create a plan: Begin now and take personal responsibility for managing this important transition. Dream and visualize what you want your life to be like in this next phase. Thoughtfully reflect on the answers to the questions listed above and clearly identify what financial resources will be needed to achieve your goals. Do not be surprised if your plan changes and evolves over time.

2. Develop a timeline: Project a date in the future when you want to be in this new phase. Back map the different decisions that have to be made between now and then.

3. Research the transition options at your institution: If alternatives are not in place, find like-minded colleagues, research new options, and suggest ways to pilot them.

4. Try out your plan: If possible, structure time to simulate your new life. While nothing is totally like the "real thing," this preview may give you some valuable insights.

5. Acknowledge your feelings: As you experience this process, don't be surprised if your feelings range from excitement to anxiety, anticipation to fear, and certainty to uncertainty. Identify the source of uncomfortable feelings and seek to address underlying issues.

6. Find a support group: Share your feelings, fears, hopes and dreams with others who are thinking about, experiencing, or who have successfully negotiated this transition.

7. Articulate your expectations: This new phase will often alter your current relationships. By articulating your expectations to those closest to you and having them do the same, you can identify and talk through expectations that are significantly different.

8. Cultivate a positive attitude: You have complete control over your attitude. Therefore, the way you approach this new phase of your life will have significant impact on how you feel about retirement transitions.

As indicated at the beginning of this chapter, retirement means different things to different people. What you make of your retirement is really up to you; so start dreaming and enjoy the opportunity to make it your own.

Chapter 5: Partial Retirement is On the Rise

Why more Americans and Europeans are opting for 'bridge' jobs after leaving full-time positions.

Partial retirement wasn't all that common in the 60s. More than 50 years later, a substantial percentage of people now hold a "bridge" job before they stop working for good.

In fact, 20 percent of workers between the ages of 65 and 67 and analyzed in a recent study are partially retired, up from just 5 to 10 percent in 1960.

Partial Retirement is Starting Earlier.

More workers are slowing down earlier, too. 15 percent of those 60 to 62 years old are partially retired. Partial retirement among this younger group was "virtually non-existent." in 1960.

Partial retirement is a job in which income doesn't exceed 50 percent of the maximum annual earnings a person made in his lifetime.

In the analysis, researchers looked at lifetime earnings histories of white males between 1960 and 2010, categorizing the status of workers as full-time, partially retired or fully retired. (The study was restricted to white males as an attempt to control for changes in the racial and gender composition of the work force over these years.) Researchers also only considered people with at least five years of continuous earnings of more than $5,000 (in 1984 dollars), to exclude those with irregular working histories.

It is becoming increasingly common for older workers to exit a career job prior to retirement and continue in a lower-paying 'bridge' job,".

A big reason for the increase in partial retirement is higher unemployment.

People between age 63 and 67 are especially sensitive to increases in the national unemployment rate, according to the report. For every 1 percent rise in unemployment, there's a 1 percent drop in full employment for those between the ages of 55 and 75 and there is as much as a 2 percent drop in full employment for those between 63 and 67.

More people are also apt to exit the labour force during times of high inflation, possibly because wages don't keep up with the increased cost of goods and services, according to the study.

But these workers may not be able to afford full retirement, or they may want to continue working to stay active. As a result, they accept jobs for lesser pay.

Chapter 6: Coping With Extremely Early Retirement

Retiring too soon can derail your financial plans.

It's a story heard all too often. Workers in their 50s are pushed into retirement early and, unable to find work, begin to tap their savings. But some simple strategies might help minimize the damage to a household's savings.

A study last year by a research firm found that almost half of 1,533 retired workers who were surveyed had retired earlier than planned and often not by choice. Seventeen percent left the workforce for health reasons; 14 percent were bought out and seven percent exited because of negative working conditions.

Finding a new job in later life is difficult, at best and drawing from retirement savings, in such circumstances, often becomes unavoidable. Households can take certain steps to keep any cracks in a nest egg from becoming larger than necessary.

1. Delay withdrawals if you can.

Take on a part-time job, if possible, or take a knife to the household budget. In short, consider any action that will help you put off withdrawing from your retirement account for as many months as possible.

The thinking. Even if a reduced pay cheque wouldn't keep you on your previous savings track, at least it might let you preserve what you already managed to stock away.

2. Replace tapped savings

If early nest-egg withdrawals become necessary, make paying yourself back a top priority.

For example; a 60-year-old accountant in suburban Detroit who lost his job in 2008. He and his wife eventually turned to his 401(k) to help pay the bills.

Now working again, he contributed four percent of his pay to his 401(k) last year and this year raised it to 10 percent.

"My wife and I were used to doing things on an austerity basis," he said. "We live cheap and save everything else. When you have 10 years to build it back up, you have to work harder at it than you do when you have 30." he said.

3. Think strategically about social security.

Yes, if you lost your job before you planned to stop working and are at least 62 years old in the U.S. claiming Social Security might look like the best solution. But you give up a bigger potential payout, because Social Security benefits increase roughly eight percent a year every year you delay collecting between your full retirement age and age 70.

Chapter 7: What Early Retirees Can Teach the Rest of Us

Many Americans and Europeans today say they despair of ever being able to retire, let alone retire early. But there's a small and growing group of people who take a much different view.

They believe it's not only possible to retire early, but that you can do it in your 30s or 40s.

While their "Early Retirement Extreme" (ERE) notion may seem to be coming a little late if you are in your 50s or 60s, mid-lifers might want to consider their advice if the goal is to retire as soon as possible.

The Early Retirement Extreme moniker comes from the title of a blog and 2010 book by one of the movement's leading proponents, Jacob Lund Fisker. He's a 38-year-old physicist in Chicago who "retired" at the age of 33 with what he believes to be enough savings to last the rest of his life even if he never works again.

I should have called it 'Financial Independence Extreme," he says. "I think 'financial independence' will be to the 21st century what 'retirement' was to the 20th century."

Another popular "extreme retiree" goes by the name of Mr. Money Mustache, a self-described "freaky financial magician" from Longmont, Colo. named Pete (he prefers not to reveal his last name). He and his wife retired at age 30 (on "two normal salaries with no lottery winnings or Silicon Valley buyout windfalls").

How they did it.

Here are the three-step process Fisker, Mr. Money Mustache and others recommend to pull it off.

1. Embrace a very frugal lifestyle. That means cutting back substantially on biggies like your home and car expenses as well as learning to cook (to save on dining out and prepared foods) and to do more things yourself rather than pay someone else to do them.

2. Save like crazy. Ideally, invest at least 75% of your income. Put another way, if you can live on one dollar out of four and invest the other three, you will save enough money to cover three years' worth of future expenses in just one year.

3. Once your investments are sufficient to support that very frugal lifestyle for the rest of your life, consider yourself free to retire. Fisker sets the savings target at 25 to 40 times annual expenses, depending on how many years you have ahead of you.

As a writer on retirement, I can tell you that I approached this idea with more than a little scepticism. But after listening to Fisker and Mr. Money Mustache interview, I was struck by how level-headed both of them seemed.

Neither is the sort of finger-wagging, anti-materialist scold you might expect. Both offer their lives as examples of an alternative approach to retirement, rather than the one true path everybody else should follow.

It's never too late to retire early.

Fisker and Mustache believe that not only isn't it too late for those of us in our 50s or beyond to contemplate early retirement strategies, but we might actually be in a better position to benefit than our younger counterparts.

For one thing, many of us are near our peak-earning years, giving us more income to sock away if we can. Plus, our child-rearing expenses may be largely behind us, also freeing up cash.

"The point is that mindful spending and saving can lead to a safe retirement in five to 10 years," Fisker says. "Someone who's 50 still has time to accumulate enough savings and retire before the traditional retirement age. For someone older, who thinks he can never retire, ERE is a path to a secure retirement in a fairly short timeframe."

Mustache sees things similarly. "Financial independence is not an age-related concept," he says. "It simply means your income from sources other than work is enough to pay for your lifestyle."

The wrong retirement focus.

Most people wrongly focus on the income side of this equation, he says. "They want as much income as possible in retirement, to ensure the happiest possible life. What they are missing is that happiness is almost completely unrelated to how much you spend."

Mustache maintains that with a bit of learning and reflection, almost anyone can learn to live happily on half of their take-home pay or less. That "allows savings to compound and set you free rapidly."

Sceptical? He suggests a trial run.

"Try some experiments in your own lifestyle that cut down your costs and watch the surprising results on how happy you are," says Mustache. You might end up driving less, walking more, cooking more and spending more time enjoying nature rather than costly leisure activities, he adds.

Interestingly, the activities that extreme early retirees recommend for saving money bear a strong resemblance to the things many of us look forward to in retirement anyway, such as cooking, gardening, walking and biking.

Their choice to live in smaller homes and not be "owned" by possessions also fits nicely with the attitude many of us adopt as we get older (and, we hope, wiser).

What it takes to succeed.

That's not to say the extreme approach will work for everyone. Among the prerequisites.

An understanding family. If you have a significant other, he or she had better be on board with this new lifestyle. Otherwise, you could be in for some extreme arguments, if not a costly breakup. Both Fisker and Mustache are married, and Mustache has a young son. All seem to have gotten with the program.

A love not just grudging tolerance of frugality. "The mistake many make when becoming frugal," Fisker writes in his book, "is that they don't replace their previous vision of accumulating more stuff with an equally strong vision of doing something else." As a result, they feel deprived rather than liberated.

Plenty of stuff to do. Having meaningful activities to fill the day is key to successful retirement at any age, but it's especially important if you retire when your peers (and perhaps spouse) are still doing the 9 to 5 thing. Mustache, for example, enjoys carpentry and is rebuilding a 1950s house to 2014 standards a few blocks from his current home. Fisker has actually taken a job since his book came out. His financial independence, he says, gives him the freedom to work

or quit work and take up another activity that interests him without worrying about a pay cheque.

A do-it-yourself mentality. In order to hit their savings goals, early retirees need to learn to do things for themselves that many of the rest of us pay others to do. That could mean everything from home and car (or bike) repairs to cutting your own hair.

Good humour. I was struck by Mustache's upbeat attitude and he was asked how important optimism is to making a go of this. "Optimism is the key to making anything work well," he says. "Without it, people end up paralyzed and afraid to try new things, which means they can become stuck in the same rut for decades." Optimists, he adds, can fire up themselves and the people around them. "This creates a team of people all working for the same goals and supporting each other, which is a recipe for greater accomplishment in life, and a lot more fun as well," he says.

Hmmm… Could it be that these guys are on to something?

Chapter 8: Three Best and Worst Reasons for Retiring Early

Unfortunately, too many others who retire early don't have such a plan. They retire for all the wrong reasons, such as being bored at work. When they leave the workforce, they find that they are bored at home too. They planned for the savings side of retirement, but they didn't come up with a strategy for how they were going to fill their days.

1. Best: You Want to Pursue a Passion.

The best reason to retire early is to follow a new dream.

I retired early to take the skills I learned in corporate world and use them in all of my joint venture/venture capitalist businesses. I can bring excellent service to my customers and business partners. That is something I did really like to do and I am doing now.

Those retiring early need to find what they really like to do, too. Otherwise those hours at home can get awfully tedious.

2. Best: You Want to Preserve Your Health.

Some people have to retire early for health reasons; maybe their jobs require hard labour that is wrecking their bodies. I believes that retiring early to preserve your health as long as you can afford the move makes sense.

One of the best reasons to retire early is to enjoy good health and to have fun. If retiring early can help you do this, and it won't put you in a financial bind, by all means, consider leaving the workforce early.

3. Best: You Want to Take On Something New.

In my humble opinion leaving the workforce early to learn a new skill or trade is a sound decision and I am talking from experience because I did just that at the age of 47.

Many early retirees return to school to earn a degree. They might not use it in their professional pursuits, but the degree could enrich their lives.

Others might retire early to open their own business or help their adult children run their businesses.

There are so many things you can do after retirement if you have a plan. Retirement is as much an emotional decision as it is a financial one. If you are not emotionally ready for retirement, you will struggle, even if you can financially afford leaving your job early.

1. Worst: You Want to Travel the Globe.

If your only plan for your post-work years is to travel, you might be retiring early for a bad reason. Travelling is expensive and after too many trips, globetrotting might lose part of its allure.

When you travel, you still have to pay those property taxes on the home you own in Florida or London. Those don't go away just because you are travelling in Asia or Africa. Vacation costs and second-home costs can add up. If you take a $8,000 vacation once, that is not a big deal. But if you take a $8,000 vacation trip every year for the next 10 years, that can hurt your finances.

2. Worst: You Want to Spend More Time With Your Spouse.

It might sound good to retire early so you can hang out with your husband, wife or partner. If one or both of you have been working full-time, you haven't spent all day, every day together before. You could find that you get on each other's nerves.

This illustrates again how important it is to have a plan for how you will spend your time in retirement.

3. Worst: You are Bored at Work.

It's not surprising that many people retire early to alleviate work ennui. But this can be a dangerous reason. Boredom at the office can easily become boredom at home and boredom at home can wreck your finances.

Most people think their expenses will go down once they retire, but that is not always the case. You need to be entertained after you retire. You tend to spend more on vacations. You might buy a motorcycle. You might go out to dinner more often. You might spend as a way to alleviate your boredom.

Don't call it quits until you have considered all for the above rationals.

Chapter 9: Key Retirement Concerns and Planning Tips for Women

Retirement planning is extremely important for women, and ideally it should consider the big picture including financial resources, the family's situation, risks, and employment. Nevertheless, many women are more focused on meeting their families' current needs than on their longer-term futures. This chapter looks at how family issues can shape women's retirement plans and examines issues and planning steps that might otherwise be overlooked.

Women have different retirement concerns than men. Recent focus group studies by the Society of Actuaries examined men's and women's perspectives on retirement separately. Our research showed that women expressed much more concern about their retirement futures than did men, and they also reacted to the discussion quite differently. Men were more willing to wait for a problem to arise, rather than plan for it.

1. Longer life and longer disability: Women outlive men who are the same age by three to four years on average, and as a result, make up the majority of older people world population and more of their longer life is expected to include some form of disability. Males age 65 are expected to spend 1.5 years with mild or moderate disability and 1.5 years more severely disabled. In contrast, women age 65 are expected to spend 3.0 years with mild or moderate disability and 2.8 years more severely disabled.

2. Planning horizons inadequate: Although women are expected to live longer, they tend to plan for about the same period of time as men. In fact, both groups often plan for too short a period, but the magnitude of the shortfall is greater for women. It is further compounded by the fact that women average lower pay and have fewer years in the labour force than men. This makes it harder to grow their pensions and Social Security benefits.

3. Family issues and retirement: When family members help each other out, this can be viewed as a form of informal risk-pooling. In times past there was much family support for the elderly, but today, older persons may have few family members able and willing to help out. Moreover, women often marry older men, or are divorced; as a result they may spend years alone. Also in the past, older family members needing help were invited to move in with children or other relatives. By contrast, the blended families of today are often less willing and able to take in their elders. For instance, children may be less willing to help step-parents, once their natural parents are gone.

4. Why people retire: When women retire, they are likely to be influenced in this decision by their spouses' retirement, as well as care-giving needs of their spouses or other family members. Studies show that 44% of men and 60% of women approaching retirement anticipate that their spouses' retirement decisions will affect the timing of their own retirements. If a woman retires early for family reasons, she should be careful to insure that there will be adequate resources for her future. In the majority of couples, it is the wife who lives longer and is more likely to run out of money in retirement.

5. Care-giving and retirement: Many women leave jobs or reduce their work schedules to care for children or older family members, whether parents or spouses. Unfortunately people tend to overlook the cost of care-giving on retirement security, as analyzed by a recent Society of Actuaries study. This analysis estimates that lifetime wealth can fall by $303,800 for care-givers who drop out of the workforce. So when women devote themselves to care-giving for older family members, they must be careful to not sacrifice their own retirement security. Moreover, employers bear part of the burden too; nationally care-giving reduces productivity by an annual $25 billion.

6. Planning using averages is risky: Most retirement planning focuses on the average amount of money needed for success in retirement. In contrast, statistical modelling explores a distribution of outcomes. How much you need to be 95% sure of not running out of money is much higher than the amount you need to be 50% sure, largely due to the risks of shocks such as bad investment results, major long term care expenses, and unexpected health care expenses. While coping strategies such as working longer, reducing expenses, and phased retirement can help, these strategies may not provide enough to deal with major shocks.

For example, an American couple at age 62 having income and wealth at the 75th percentile has $105,000 of household income and an estimated $250,000 of non-housing wealth. A recent Society of Actuaries report shows that they need $544,000 at retirement to give them a 50% chance of not running out. The same family would require $1million to have a 95% chance of having enough. If they purchased long term care insurance covering both spouses, the $544,000 goes up to $599,000 reflecting the cost of insurance, but the $1 million falls to $851,000. The insurance benefits are a big help to those with a major claim. If they bought long term care insurance on the wife only, the numbers are $581,000 and $871,000, respectively. Planning for the 50% safety level unfortunately means that families will fall short half the time.

Here are some tips for women to better address these issues.

These suggestions go beyond very basic advice related to saving earlier, saving more, investing well, and being very careful about Social Security claiming strategy. Those are essential for building a good retirement foundation.

Participate with your partner in employee benefit plan decisions and in elections when there are choices.

Before leaving a job for care-giving, or assuming the role of major care-giver, it is important to evaluate the decision's long-term financial and personal impacts for the individual taking this step.

Think about the retirement security issues that apply when making decisions about leaving or taking a job, and about getting married or getting divorced. Pay particular attention to retirement issues at the time of divorce.

Build a retirement plan that works not only for a couple, but also for both individuals if they are not together. They should plan for the remaining life of the longer-lived member of the couple.

Consider risks and shocks including the need for long term care, disability, major health expenses and investment risk in planning.

Build a support network, including family, friends, and appropriate professional help. Don't be afraid to ask for help when it is needed.

Chapter 10: The Biggest Retirement Planning Mistakes

Retirement readiness is near an all-time low. Just 14% of adults are very confident they will live comfortably after quitting work and 60% have less than $25,000 in savings, according to the Employee Benefits Research Institute's most recent Retirement Confidence Survey.

Not saving enough is easily the biggest retirement planning mistake. It may be understandable, given the tough jobs picture. But if you are working you should strive to save at least 10% of every pay cheque. Meanwhile, here are other common retirement planning mistakes to avoid.

1. Assuming you have control over when you quit.

Most people assume they will retire at a certain age. In fact, two in five retire earlier than planned. Why? Job loss. Illness. You can't even be sure you will be able to work part-time. So it's critical that you start saving early while your health and career are on steady footing.

2. Ignoring the tax impact of distributions.

In retirement, the name of the game is creating tax-efficient income. It's helpful to have several kinds of accounts; from fully taxable to tax-deferred (401(k)) to tax-free (Roth IRA). That will give you the most flexibility when drawing down assets. Avoid taking early distributions. Nearly half of workplace retirement plan participants cash out their balances when they change jobs. That triggers penalties and sets back the long-term growth of their assets.

3. Not saving enough for medical costs.

Retiree health care plans are fading away. The average couple retiring today at age 65 in the U.S. will spend $285,000 in health-care costs in retirement. Even for those on Medicare, out-of-pocket expenses for people in retirement have jumped 50% in the past decade. You must understand how to plan for this expense.

4. Failing to lock up lifetime income.

Guaranteed income pensions are fading away too. A huge challenge for today's retirees is converting savings to a reliable income stream so that they can be sure to cover fixed expenses for life. Social Security helps. An immediate fixed annuity is a good way to shore up this need.

5. Retiring too soon.

Staying on the job a few extra years can boost your retirement income by a third or more because it lets you avoid tapping savings right away and delay taking Social Security benefits, which increase about 8% every year you wait. Half of all Americans don't even wait to their normal retirement age (66 for most) before collecting Social Security. If you are healthy, try to wait to age 70.

6. Underestimating longevity.

Some 60% of Americans live longer than they expect. At age 65, a woman can expect to live to an average of 84; the average for men is 81. But many will make it to 95 or even 100. To be safe, plan accordingly.

7. Drawing down retirement savings too rapidly.

If you don't want to outlive your money, keep your annual drawdown rate to 4% of assets. At that rate, if you begin withdrawals at age 65 you should have income to age 95.

The old rules about how much of your retirement savings to withdraw each month have been recently turned on their head. In the 1990s, financial planner William Bengen crunched some numbers and concluded that the average person retiring at 65 could draw down as much as 4 percent annually from a balanced portfolio of stocks and bonds without fear of outliving his or her money and most financial planners followed that rule for their clients.

But today experts increasingly believe that the sluggish investment climate, low interest rates on savings, the unpredictable employment market and increased longevity make such blanket guidelines unrealistic for many people. Instead, they say, you need to add up your current retirement assets, project what they will be when you begin retirement then work with an adviser to come up with a realistic annual drawdown rate for you.

8. Try the 3 bucket approach.

One way to increase the odds that your money will last your lifetime is by using what is known as "the 3 bucket" approach. The "buckets" represent the broad categories of investments for a portion of your retirement savings. Diversifying your retirement portfolio into these buckets will help immunize you against fluctuations in the stock and bond markets, so your money will be there when you need it.

In general terms, here's what a bucket plan looks like.

Bucket Number 1: Is the money you can get your hands on easily, for day-to-day expenses. Think of things like your bank accounts and money market funds. This bucket can be filled, in part, from money you earn by working in retirement and from Social Security.

Bucket Number 2: Is the bulk of your retirement investments, with a mix of stocks, bonds and cash.

Bucket Number 3: Is money you are investing aggressively mostly in stocks to provide a cushion that will help you handle heavy health care expenses in retirement.

While you could set up and manage a bucket system on your own, it's probably a good idea to do it with a financial planner. You don't make decisions like these and put them on autopilot you need to be reviewing this mix every year.

Chapter 11: Tips for Last-Minute Retirement Planning

What happens when you wake up one morning and realize that you are not where you want to be in terms of retirement? That is a situation many people find themselves in today.

Your best bet is saving early and often. But if you are nearing your desired retirement age, you might need to move into retirement mode if you haven't been saving for as long as you would like. If you find yourself in need of last-minute retirement planning, here are some tips to help you make the best of the current situation.

1. Maximize your employer match. If your company offers a match, you should check to make sure you are maximizing it. It's free money for you. If you aren't getting the maximum match, you should do what it takes to get that match.

In fact, this late in the game, you need to boost your retirement account contributions as much as you can afford to. If you are in the U.S. and already maxed out a 401(k), open an IRA (Traditional or Roth) so you can make additional tax-advantaged contributions.

2. Catch-up contributions. If you are over age 50, you have the chance to make catch-up contributions. If you have reached the point where you are maxing out your retirement accounts (and hopefully you are

to that point at this juncture), and you are eligible, it's time to put in some catch-up contributions in order to help the cause.

3. Look into index funds or ETFs. Even this late in the game, you might be able to benefit from the right asset allocation. Index funds and index ETFs offer a degree of diversity, are low cost, and can provide you with a decent amount of growth. Additionally, dividend stocks can provide you with a way to ramp up your portfolio. A dividend reinvestment plan can provide automatic reinvestment to compound your gains.

It's a good idea to consult a knowledgeable financial professional about your risk tolerance before making this decision. Getting an unbiased view of what investments might be appropriate for your situation will help your efforts to retire in your desired time frame.

4. Consider working longer. For some would-be retirees, a longer career is a necessity. If you have started saving too late, you might need a few extra years to build your nest egg a little bit. This doesn't mean that you have to work full time. You might be able to manage working part time, or on a freelance or consulting basis. Even a home-based business might be an option. Look at the alternatives, and determine how you might put off living only on your nest egg for a little bit longer.

5. Downsize your lifestyle. Another reality is that you might need to downsize your lifestyle if your nest egg is insufficient for your current needs. In some cases, if you don't want to work a little bit longer, you might need to re-evaluate your expenses. Selling some items, selling your home and moving into a smaller place, and perhaps adjusting your view of retirement might be necessary if your nest egg isn't keeping pace.

Chapter 12: A Retirement Annuity Strategy That Offers Peace of Mind

A friend recently told me he is planning to retire but he is worried about his financial ability to do so. When he described his situation, I told him it seemed to me he didn't have anything to worry about. But, still he is worried.

How much should a business owner withdraw at retirement?

My friend's situation: A debt-free widower in his late 50s, He will be retiring from his firm at age 60. He will receive a five year buy-out of his stock at retirement, has a sizeable 401(k) and has built up a comfortable nest egg of savings. The problem is he is so used to making a healthy income from working all these years that he is uncomfortable with the idea of spending down his assets to pay for his retirement. His problem is not that he has a tangible lack of wealth, but that he has the intangible fear of outliving his assets.

People are far more comfortable with a retirement strategy of spending their income than spending their assets for instance the 4½ Percent Rule that some planners use as a retirement income approach. This rule of thumb suggests that a couple can annually withdraw 4.5% of their retirement capital, adjusting the withdrawal rate upward each year for inflation, with little fear of outliving their income. For some retirees this approach raises the fear and they ask the following questions. What happens if I don't make enough on my portfolio to justify this income; will I outlive my assets? For others, it engenders the opposite emotion. What if my assets do better than this; will I have been too conservative, and robbed myself of a happy retirement while leaving more than I intended to my kids?

An annuity strategy addresses both of these fears.

Although these concerns are more rooted in emotions than numbers, the simple fact is a worried retiree is not a happy retiree. Our suggested strategy is to convert assets into guaranteed income. The point is that people are far more comfortable living within a known income stream than they are spending down assets for an unknown period of time. Thus, we suggests a prospective or current retiree take a portion of retirement assets and purchase a fixed annuity income stream. The annuity income can begin immediately or it can be deferred until a later age. It can pay an income for life, for a period of years or for the greater of life and a guaranteed period of years.

This idea isn't just an academic construct, but a realistic financial tactic. Commercial annuities offer a number of flexible features and options that come in handy in crafting a retirement income strategy with peace of mind. Consider my friend's situation and see where annuities might help him.

Ladder the purchase of annuities: Similar to a bond laddering strategy, the idea would be to invest in annuities that begin and end at different times. Start with laddering the purchase of annuities. My friend has a few years until he retires. When he retires at age 60, he will largely continue his current stream of income until he reaches 65; the age at which the payments on his equity interest in the firm cease.

Particularly since we are in a low interest rate environment, he might consider investing in a deferred annuity, where each year he deposits dollars to build up tax-deferred retirement capital; wealth he can then convert into an income at age 65. Although he can buy a new annuity each year, he doesn't necessarily need to since a deferred annuity typically credits interest at current rates and, deferred annuities have options as to how the money will eventually be distributed. Dave annually deposits money into his deferred annuity, and then at age 65 he could either take a fixed payout for life or withdraw a percentage of his annuity each year. This strategy gives him peace of mind that he's replacing the income he loses when his buy-out is completed, yet gives him options as to how and when he receives income thereafter.

Ladder the payout of annuities: A different laddering strategy would be to target multiple payout periods. My friend is very active and wants to enjoy the "go-go" period of his retirement before it becomes a "slow-go". He could take some of his capital and buy an annuity that pays out a significant income from 65 to 75, his hoped for "go-go" years. He could then buy a different annuity that doesn't begin payouts until age 75, and is designed to pay out for the remainder of his life. This provides him with a higher income during his active years; and, then an income, albeit smaller, that he can't outlive in his later years.

Annuities as a health care safety net: One of his concerns is the increasing cost of health care and the staggering cost of long-term care facilities. Annuities aren't designed to replace Medigap and long-term care insurance, but they can provide an affluent retiree with a safety net. Even though my friend has a significant retirement fund built up, he is especially worried about having enough money for health costs in his later years when he might be committed to a long-term care facility. An annuity can provide an income supplement. One form of an annuity may be particularly helpful; a deferred income annuity.

Consumers are generally familiar with deferred annuities, where they put money away now in order to take out an income in the future (the approach discussed above). These products typically credit current market rates, are flexible as to when they are annuitized and offer the ability to be surrendered. Not as many people are familiar with deferred income annuities. With this policy form, you put away money now and will receive a fixed income for a predetermined period of years at a designated future date. Because the owner can't surrender or commute the annuity, the insurer is able to pay a higher income in the future. My friend might peel off $100,000 of his retirement capital today to receive a guaranteed lifetime income in the range of $30,000 when he attains age 80. This income would be there to provide a safety net in case he has unexpected health care costs, or should Social Security and Medicare fail to perform as planned.

Convert an asset into an annuity: The decision to purchase an annuity doesn't exist in a vacuum. People near retirement typically have a number of financial assets at their disposal which can be turned into a stream of annuity payments. For example, his 401(k) can be paid out in the form of an annuity for life. In fact, recently the U.S. Treasury issued final regulations amending required minimum distribution rules to allow annuity investors to start collecting later. Even the IRS recognizes the retirement income value of this strategy. My friend also has a cash value life insurance policy. If he feels he no longer needs the death benefit of the policy, he can exchange the policy tax-free for an annuity. Likewise, he can convert his Roth IRA into a guaranteed stream of tax-free payments for life.

The sole aim of a retirement income strategy cannot be simply to maximize retirement income. There are too many variables to even accurately make this calculation, and how will you ever know if you succeeded? As my friend Dave's situation makes clear, intangible concerns such as peace-of-mind must also factor into the planning. There is no one approach that solves this dilemma, but the use of annuities in retirement income planning is a strategy worth considering.

Chapter 13: Smart Ways to Avoid Outliving Your Money

Plan now so you are financially prepared for retirement.

A 50-year-old man today has a projected average life expectancy of 82; for a 50-year-old woman, it's 85, according to the Social Security Administration and in the future, healthy adults are expected to live to 90 or 100.

Are you financially prepared to live that long? If not, you are far from alone.

The Employee Benefit Research Institute reported last year that 56 percent of Americans saving for retirement had less than $25,000 in savings and investments (excluding the value of their primary residence and any pension plans). The difficulties so many people have saving for retirement is a dire subject and under-discussed.

But there are a few things you can do to help you avoid outliving your money in retirement:

1. Get a retirement plan started now.

It's a cliché, but it really is never too late to plan for retirement. Retirement planning today should include a kitchen sink of such issues as; whether you will need or want to work in retirement, whether you have chronic or end-of-life health issues, whether you will need to support aging relatives or out-of-work adult children, and when to start claiming Social Security.

We recommend putting yourself on a five-year clock and start cutting expenses five years before retirement. That way, you will find it easier to live on your retirement savings when the time comes.

2. Work with a Team of Sharp Professionals.

You will be more likely to make your money last if you get advice from people who know a lot about how to do it. Your team of money professionals might include a financial planner or retirement planner, a tax expert and an estate planner.

Work with these experts to answer four key questions, as well as bearing in mind the answers to the "kitchen sink" issues mentioned earlier in this chapter.

How much money will I need to live on in retirement?

How much money will I want to withdraw from savings each month in retirement?

How much money will I need in total savings when I retire so that I will be able to withdraw that amount each month?

What types of lifestyle changes will I need to make in retirement so that I will be able to live on my savings and other retirement income?

Chapter 14: Questions to Ask Before Taking a Pension Lump Sum Offer

When it comes to analyzing a lump sum pension offer, employees need more help. That is the conclusion of a new Government Accountability Office (GAO) report.

Participants presented with a lump sum offer may not have a full appreciation of the range of risks involved in forfeiting their lifetime annuity under their sponsor's plan, the report says. Big employers started shedding plan liabilities after the great recession, and the trend appears to be accelerating. In a recent survey of 183 defined benefit plan sponsors, Aon Hewitt found that one-fifth said they are very likely to offer terminated vested participants a lump sum window in 2015.

The GAO looked at 22 employers who offered lump sum windows in 2012 involving nearly 500,000 former employees who were offered payouts totalling $9.25 billion. The lump sum offer packets employers provided lacked key information that could have helped workers make an informed decision whether or not to take the lump sum. Most packets provided only five of the eight key pieces of information the GAO identified as necessary to making an informed decision and all packets left out at least one key piece.

With a defined benefit pension, your employer provides you with a fixed monthly payment in retirement for as long as you live. By contrast, the report warns, lump sum payments carry no guarantees with respect to the amount and duration of future retirement income they may ultimately provide.

What is driving lump sum offers? Employers want to get pension obligations off their books to free up cash flow. Rising Pension Benefit Guaranty Corporation (PBGC) premiums employers pay in per employee covered are another incentive and another reason the offers are coming in now. Until 2016, employers can use old mortality tables that show shorter life expectancies, meaning the lump sums they can offer now are lower than what they'll have to pay in the future.

Note, the lump sum offer is a different pension de-risking strategy than the purchase of a "buy-out" group annuity. In the latter case, the employer transfers pension plan assets to an insurance company that assumes the responsibility for making pension benefit payments (the employer is totally out of the loop in both cases). General Motors and Verizon transferred $32.6 billion in plan liabilities to Prudential in 2012; Kimberly-Clark recently announced a $2.5 billion transfer of pension liabilities to Prudential and Mass Mutual.

How much can it cost you to take a lump? Annuitizing a lump sum payment by purchasing a retail annuity on your own could result in significantly less income than if you stick with the plan's annuity (or participate in a group annuity buy-out). The potential reduction in monthly retirement income for a 55-year-old woman is 41%; for a 55-year-old man, it's 36%, the GAO estimates. What is going on; insurers in the retail market use different interest rate assumptions and mortality tables, can price annuities differently for men and women, and need to make a profit.

Rolling over a lump sum into an IRA has different risks. There is the danger of outliving your assets, the challenge of making complex investment and drawdown decisions, and the difficulty of finding trusted advice, the GAO report warns.

Here are the eight key questions the GAO says a lump sum offer should address. Make sure you can answer them before taking an offer.

Key Question 1: What benefit options are available? The lump sum offer should include the lump sum payment option, an immediate annuity option (that is the monthly benefit amount if payments begin right away), a deferred annuity option (that is the estimated monthly benefit amount promised once you reach normal retirement age), and it should state whether there is a subsidized early retirement option.

One employee in the GAO study whose offer didn't include the deferred annuity option had this to say. "I'm glad I keep my files up to date. It would have been really hard to figure out whether I was being offered a good deal if I hadn't had a copy of what I'd get at retirement if I waited. I don't think it's right I had to dig for this information." Another employee complained that the offer he got was "misleading" because it didn't indicate eligibility for an early retirement pension. In some cases, employees can get unreduced monthly benefits as early as age 60 in the US 55 in the UK. Obviously that changes the calculus. Ask if it applies to you.

You can also be proactive. While employers should send you a pension statement every three years, you can request one annually.

Key Question 2: How was the lump sum calculated? The details should include what interest rates and mortality assumptions were used, and if the value of any additional plan benefits was included.

Key Question 3: What is the relative value of the lump sum versus the monthly annuity? The GAO found the federally-required relative value notice, usually in the form of a table, is basically useless without additional explanation of what the numbers mean. You need to know the assumptions used. Some pension plan sponsor call centres will provide this.

Key Question 4: What are potential positive and negative ramifications of accepting the lump sum? On the plus side, with a lump sum, you have the potential to leave a bequest to a beneficiary other than a spouse, you can consolidate retirement assets, and you get control over investment decisions. On the downside, there is investment risk. Do you want to be responsible for picking investments and putting in place a drawdown plan? There is also longevity risk that you will outlive your money. Another issue is leakage spending some of the lump sum today will have a big impact on the value of your nest egg over time.

Key Question 5: What are the tax implications of accepting a lump sum? All the lump sum offer packets the GAO reviewed included the federally-required tax consequence information. Read it carefully. If you are under 59.5 in the US; don't roll over the money into a qualified retirement plan (like a 401(k) or an IRA), you face a 10% penalty in addition to income taxes.

Key Question 6: What is the role of the Pension Benefit Guaranty Corp. (PBGC) and what level of protection does PBGC provide on each benefit option? One reason employees cited for taking a lump sum is fear that their employer might go under and leave them with nothing. These same employees often didn't know that much, if not all, of their plan benefit would be paid by PBGC if their employer pension plan was terminated with insufficient funds to make payouts.

Key Question 7: What are the instructions for either accepting or rejecting the lump sum offer? Windows can be short; pay attention to deadlines. Also, keep in mind that your spouse has to sign off on a lump sum acceptance (because he or she is losing the right to monthly pension benefits).

Key Question 8: Who can be contacted for more information or assistance? The GAO found that employees receiving lump sum offers got cold calls; don't fall for a retail annuity insurance salesman without carefully considering your options.

Chapter 15: Expenses to Ditch in Retirement

Financial experts throw around a bunch of guesstimates about how much you will need to save for retirement, but one thing is certain. The more you can keep costs down once you stop working full time, the better off you will be.

Here are five retirement expenses that financial advisers say you might want to drop.

1. Your second car or luxury car: Do you and your spouse really need one or two fancy autos once you retire? After all, luxury car payments can easily run $500 a month, which amounts to $12,000 or more over a two-year period.

If you are nearing retirement, there is a decent chance you own at least one pricey car. Our research shows that boomers account for 56 percent of Mercedes-Benz buyers, for example, and 55 percent of Jaguar and Porsche owners.

You might want to replace a deluxe model with a more modest auto. Maybe you have one nice car to drive to parties and things like that and one less expensive car to take grocery shopping and on errands.

How to drop the expense One option is to sell your second car and replace it with a used auto. Not only will your car payments drop, you may save hundreds of dollars a year on insurance because you might not need comprehensive coverage on a used car. Comprehensive coverage reimburses you for incidents other than collisions, like damages if your auto is stolen. You may also want to drop collision coverage for an older car with little value.

Alternatively, you could try ditching the second car altogether, especially if you and your spouse expect to do most things together in retirement.

If you are a little nervous about managing with one vehicle, consider joining a car-sharing service. Some care hire company in the US, lets you rent vehicles for between one hour and four days; rates depend on where you live.

2. High insurance costs: Many people retire and hang on to all their insurance policies, but that can be a costly mistake.

For one thing, you may no longer need life insurance or disability insurance and ditching them could save you hundreds of dollars annually.

If you don't have any dependents who did need financial help after you died, you probably don't need life insurance in retirement. If you aren't working anymore, you can likely skip disability insurance.

Those aren't the only ways you can save on insurance in retirement, though. A lot of people still have their homeowners deductibles and auto insurance deductibles set very low in retirement. But many retirees have enough in savings to switch to higher deductibles and self-insure against small losses.

Upping your deductibles will lower your premiums and might put hundreds of dollars back in your pocket.

How to drop the expense. If you and your financial adviser; if you have one decide you can scrap your disability and life policies, call your insurers to cancel them. Understand, however, the process may be more complicated than you think.

For example, if you have cash value in a life insurance policy, you should examine the tax consequences before dropping the coverage. If you cancel, you might take a tax hit. Once you surrender the policy, you will owe taxes on its tax-deferred earnings.

Rather than cancelling the policy altogether, you may want to avoid the taxes by swapping life insurance for an annuity through what is known as a tax-free exchange. If this idea seems appealing, discuss it with a financial adviser.

You should also call your homeowners and auto insurers to investigate raising the deductibles on your policies. Once you learn what your premiums would be at different deductible thresholds, visit an insurance price-comparison site to get competing quotes.

3. Your home. If you are still living in the house where you raised your kids and built up memories, you may be reluctant to sell it. But your home could be a money pit that also won't be suitable as you age.

You may also be paying the steep property taxes that go with living in a great school district, even though you no longer have school-age kids. Your home could be socking you with high utility costs as well. The combination of taxes and utility bills could cost you thousands or tens of thousands each year.

The house might be difficult for you physically in retirement, too. Its multilevel steps could be tough on your knees and, if you live in a cold climate, you could endanger your heart by shovelling the walk and driveway.

How to drop the expense. In a word, downsize. Look for a smaller home that offers one-floor living and doesn't require maintenance that comes with things like a large yard or pool.

Even if you are not quite ready to sell, start thinking about the feasibility of maintaining your home in retirement.

If you just can't bring yourself to move out, consider bringing in an aging-in-place specialist to retrofit the home and lower its maintenance expenses. The National Association of Home Builders has a directory of certified aging-in-place specialists on its site.

4. Your landline. A home phone typically costs $15 to $75 per month; this can set you back between $180 and $900 a year. But if you have decent cell phone reception in your home, you might want to cut the cord and save the landline's expense.

How to drop the expense. Call your home phone provider and ask to cancel your service. Then shop around for competitive cell phone rates.

The average monthly cell phone bill is about $47 per month but you might qualify for lower rates depending on the number of users in your plan and your data, text and minutes usage.

5. Your adult children okay, this may sound overly harsh. But the truth is that it may be wise to stop paying the bills for your grown kids once you are retired.

Nearly 6 in 10 parents (60 percent), however, are currently providing financial support to their adult children who are not in college, according to the National Endowment for Financial Education. They are paying living expenses, like rent and monthly bills, as well as providing spending money.

If you are assisting your grown children but have not saved enough to ensure that your retirement is comfortable, ask yourself: Am I prepared to move in with my children later in life when I can't afford my lifestyle? Are they prepared for that?

How to drop the expense. When your adult child needs help covering the basics, consider letting him or her live with you for a while until landing a job, rather than shelling out thousands a year on rent.

As for non-essentials, from a new car to extra spending money, our advice is straightforward. Just say no. For instance, if you are still paying for your adult child's cell phone service, isn't it about time to scrap that expense and let your son or daughter foot the bill?

Talk to your children about your financial situation in retirement so they will understand that you truly can't afford to keep handing them cash and don't allow yourself to lend them money. You may never see it again.

Chapter 16: How to Avoid Running Out of Money in Retirement

Compared to the length of retirement, 15 minutes is no time at all. But that is all some experts say you need to learn the basics of developing a plan to make your savings last as long as you need them. Still, many investors don't take this time, putting their retirement in jeopardy.

Investors' biggest errors often occur long before any buying or selling takes place. They tend to have poorly defined objectives, no real sense of their time horizon (how long they need the money to last) and don't quite understand that any investment has risks and returns to consider.

To start, ask yourself how long you will need your retirement savings.

Most investors need their savings to last as long as they do sometimes longer if they did like their portfolio to support a younger spouse, children or charity after they are gone. So exactly how long that could be for you isn't black and white.

Average life expectancies are published every year, but they can only tell you so much. After all, an average is the middle, and you probably aren't "average."

To get a better idea, consider your heredity; your family's history of health and longevity. Be sure to consider advances in health care and technology. Merely because your father died at 70 doesn't mean you will do the same. Most people outlive their ancestors, hence rising average life expectancies.

Planning early for a longer life is smart. You could also be underestimating the amount of cash flow you will need after retirement.

Maintaining your lifestyle becomes much more costly if your expenses are heavily tilted to categories of goods or services with fast-rising prices like health care. Overall inflation has averaged about 3% annually, according to Global Financial Data Inc. A retirement plan that doesn't account for inflation has a significant hole.

Here is a checklist of the key strategies to maintain your spending power for as long as you live.

Number one below is only for people who are not yet retired, but the rest apply to everyone.

1. Save more before you retire.

This is where most people fall down. It seems like every week there is a new report about how people aren't saving enough. If you are going to have money to spend beyond what you get from Social Security (and maybe a pension; if you are one of the lucky few who can still expect one), that money will have to come from your savings.

The two obvious ways to do this are to either spend less before you retire (thereby freeing up money to save) or work longer before you retire. I recommend the former; anyone can spend less, but a plan to work longer can go awry in many different ways (your job could go away, you could get too sick to do it well, etc.).

Useful as it is, though, "just save more" is by no means a complete retirement plan. A complete plan lets you start from where you are and make do with what you have got.

2. Spend less after you retire.

Spending less before you retire may be even more important, but that was covered in point number one.

Even though it's not as important, spending less after retirement has the advantage of being very easy; your taxes are lower (because you are earning less), and you are able to be more efficient about your spending (because you are not spending a third of your time at work).

3. Find a way to earn money in retirement.

When you think about it, retirement is a funny idea. It used to be that everyone worked as long as they could. When they couldn't hold up to a full day of heavy labour, they worked shorter hours and switched to lighter tasks.

With the way work is organized (at least in the United States), it's pretty hard to scale back moderately. You rarely have the choice to work half as many hours for half the money. But you probably don't need to earn anywhere near that much money. Just earning a few thousand dollars a year will stretch your retirement savings much further than you might expect.

You can do that a lot of different ways, even something as small as finding a way to make your hobbies pay their way.

4. Invest for income.

Early in your career, you probably want to invest for maximum growth. But well before you actually plan to retire, you should start shifting some of your investments toward income because income can be spent without depleting your capital.

That isn't the fashion these days. The modern wisdom of retirement planning is to figure that you can spend some of your capital every year, on the theory that your money only has to last the rest of your life, and you are not going to live forever.

But investing for income, and then holding the line on spending beyond that, is much safer.

5. Monitor your assets in retirement.

Since you can't know the future, there is no way to be sure that your portfolio will achieve any particular investment return, nor that it will support any particular spending level. But you can know the recent past.

Your portfolio will decline if the assets you have invested in go down. It will also decline if you are spending capital faster than it's growing.

If you have got a diversified portfolio with a strong income component, you don't need to worry about day-to-day portfolio fluctuations. But year-to-year portfolio fluctuations need to have your attention.

6. Respond to Changes

When you see a decline in your assets (either because your spending is outstripping your income or because the markets have moved against you), find additional ways to economize.

This is really the key action for avoiding running out of money in retirement; if your capital is declining at an unsustainable rate, spend less.

Chapter 17: How Much to Withdraw from Retirement Savings

The question of the right amount of money to withdraw from your investment portfolio each year in retirement is an often-debated topic and lately, there's been some new thinking on this subject.

The "4.5 percent rule" – originated in the early 1990s by financial adviser Bill Bengen – says that if you withdraw 4.5 percent of your retirement savings each year, adjusted for inflation, your money should last 30 years.

But this common wisdom has been questioned in recent years. The 4.5 percent target is certainly a good starting point; but this simple, one-size-fits-all plan may be off the mark for many retirees these days.

Today's investment environment, with stocks and bonds overall generating lower returns than they have historically, combined with Americans' longer life spans, means that your retirement money needs to last longer than in years past.

When the 4.5 percent rule emerged, investment portfolios were earning about 8 percent annually. Today, they are generally in the 3 to 4 percent range.

Now when you want to figure out how much to withdraw annually from your retirement funds, you need to look at three factors; your time horizon, asset allocation mix and what is most often overlooked; the potential ups and downs of investment returns during retirement.

Time Horizon Considering that your nest egg may have to last 30-plus years in retirement, the odds of success are highly dependent on your annual withdrawal rate.

Essentially, the younger you start tapping your retirement savings, the lower the annual withdrawal percentage must be for savings to last.

As an example, if you will retire at age 63, it's probably smart to dial back your withdrawal rate to 2 or 3 percent. Retiring at age 70, by contrast, may let you pull out 6 or 7 percent of your money each year. (By law in the U.S, you must start making required minimum distributions from traditional IRAs and employer-sponsored retirement plans at age 70½.)

Asset Allocation. How much of your portfolio is in stocks and how much is in bonds; your asset allocation mix will also affect the amount you can safely withdraw each year in retirement.

Naturally, most people are inclined to reduce their risk level the closer they are to the time when they need to tap their investments. While I agree with this inclination in general, putting 100 percent of your money in bonds is not likely to generate the returns you will need to make your money last 30 years or longer.

There is only a 35 percent chance of a retiree's nest egg lasting 30 years with a 4.5 percent withdrawal rate from a 100 percent bond portfolio. But there is a 100 percent chance of the money lasting that long with a portfolio that is composed of 75 percent U.S. equities and 25 percent bonds (using conservative assumptions).

If you bump the withdrawal rate up only slightly to 6 percent; these percentages drop precipitously to 11 percent (for the all-bond portfolio) and 60 percent (for the stocks and bonds portfolio), according to an article in the September 2012 issue of Journal of Financial Planning.

Consequently, a smart asset allocation strategy in retirement is a mix of stocks and bonds. The higher the percentage of bonds, the lower your annual withdrawal rate should be. You need to consider the timing of investment returns in retirement.

How much your investments earn in any given year particularly in the early years of retirement; has a ripple effect that can impact your withdrawal rate for years to come.

Your returns in the first two years of retirement are vitally important. Just ask anyone who retired in late 2007 and suffered big portfolio losses over the next couple of years. When your retirement savings take a huge hit early on, it's very hard to make up for that shrinkage in the future.

Here is how investment return timing plays into the withdrawal equation. Let's say you have $300,000 in retirement savings and plan to withdraw 4 percent ($12,000) annually for 30 years. If your portfolio declines by 10 percent in the first year of your retirement, it's already sunk to $258,000 at the end of year one, including your first year of withdrawals.

As a result, in year two and beyond, you will likely need to take out less than 4 percent if you don't want to run out of cash.

This is why it may make sense, shortly before you retire, to put a portion of your savings in a fixed annuity that will provide a guaranteed income stream for a set period of time, usually until death. Doing so will help guard against potential market downturns. The minimal amount needed to purchase a fixed annuity is typically around $10,000 to $15,000.

Over 30 years, the ups and downs of the markets can have a pronounced impact on your retirement savings.

If you earn 6 percent a year annually on a $300,000 retirement nest egg and withdraw 4 percent a year, you'd be left with $506,331 at the end of 30 years. Now, assume a 12 percent return in year one and 0 percent in year two, in a repeating pattern for 30 years. That's still an "average" 6 percent return, but the variability would cause the portfolio to worth just $482,535 by the end of 30 years a difference of nearly $24,000.

The volatility of markets means you can't just pick an annual withdrawal rate and blithely stick with it throughout retirement. Instead, you should assess the withdrawal and return rates annually to determine if the rate of withdrawal needs to be raised or lowered.

Calculating your personal withdrawal rate.

Aside from these three factors, the right withdrawal rate will also depend on your total retirement savings, your tax situation and your other income sources, like Social Security, pensions and part-time work.

There are many online tools that can help you find your personal withdrawal rate. You may also want to consult a financial professional who can help assess your situation and work with you to ensure that your money lasts as long as you do.

Chapter 18: How to Avoid Living Unhappily After Retirement

Couples need to discuss their plans, expectations, hopes and fears before it's too late.

As 75 million Americans approach retirement over the coming decade, they might be in for a rude awakening. Many long-married couples take it for granted that when one of them retires, the other will retire at the same time, or soon thereafter, and that their life together will be wonderful and fulfilling.

Yet according to the Centre for Retirement Research at Boston College, less than 20 percent of couples retire in the same year. This means that many are out of sync out of the gate. What if she wants to move across the country to be near the grandkids and he prefers a cabin by the lake so he can fish?

You wouldn't dream of retiring without a financial game plan, but what so many couples fail to realize is that they also need an emotional playbook. Tremendous conflict can arise when partners fail to articulate their hopes and dreams for retirement, as well as their candid fears about the future.

Communicating your hopes for the future.

For better and for worse, retirement imposes major changes on a marriage, and change is always stressful. Ending a career, especially one that has been rewarding, is a major life transition. On top of all the lifestyle shifts that come with it, it's ultimately a loss, so people need time to mourn. Couples cannot pretend that they or the marriage are the same.

As a writer "of a certain age," I was curious about my peers' attitudes toward retirement, so about 5 years ago I began interviewing them. I spoke with several hundred men and women over 60 who were either already retired or just starting to think about it. What I found most shocking was the level of denial and postponement in thinking about the togetherness issue. While many people had been diligent about saving and investing, few had considered the psychological jolt that usually accompanies the end of a career and the more people I talked with, the more I heard the same concerns.

Interestingly, this life transition doesn't seem to affect women the same way it does men; even those who have enjoyed a long and fruitful career. The end of women's working lives is often less traumatic because so many are multi-taskers, and work is just one of many fulfilling things in their lives.

At the same time, almost every woman expressed anxiety about her husband's post-retirement life. Even though a large percentage of the men said they were looking forward to days of "puttering around the garden" and enjoying their hobbies, almost none had considered how so much time together might affect their marriages.

The big takeaway was the "dirty little secret" that so many were reluctant to express; that 24 hours a day together is too much. I could almost boil this book down to this one sentiment. One of the women I interviewed said "I really love my husband, but sometimes when I am driving down the street and see his car in the driveway, I want to just keep going."

Men and women have different expectations.

For many unhappy-together couples, the problem starts when they don't have the same expectations of retirement, then it gets exacerbated when they don't talk about it. For some people, this is a long-awaited time for new adventures, new or deeper connections with loved ones and discovering a new purpose. For others, it means a lot of time relaxing in the hammock, at the computer or on the golf course.

To not drive each other crazy, couples need a mutually acceptable game plan for the future. They need to think about and discuss how they want to spend their time, including how much time they want to spend together. These talks should begin long before retirement.

It's important to acknowledge the gender differences. Many of my male interviewees had made their careers the primary focus of their lives. It was how they measured themselves against others and was the main source of their self-image. Some admitted that they felt less valued if they were no longer bringing in money; others were clearly apprehensive about doing "nothing" for a while.

Difficulty adjusting to retirement is not a uniquely American or European problem. Two decades ago, a Japanese physician found that as many as 60 percent of wives of Japanese retirees were suffering from similar physical symptoms, which included depression, tension headaches, stomach ulcers, rashes and other signs of stress. He dubbed this "retired husband syndrome," and researchers speculated that the women were becoming ill because their retired husbands were treating them as if they were still the boss. This is why communication is critical.

Of course, not all women find the transition to their own retirement easy. Some reported feeling like they were playing hooky if they visited a museum in the middle of a weekday. "Will people take me seriously if I am obviously not working?" one asked.

Others found it hard to find female companionship as their friends were still working or were absorbed with grandchildren. More than a few were disappointed that their husbands were not sharing in the housekeeping. One said that she felt she must either learn to play bridge or golf or face a future without friends. "I feel so isolated when my friends drop everything to spend time with their grandkids because I'm not blessed with any yet. Where are the other adults who want to do adult things?"

A 60-year-old fellow writer in England whose husband has been retired for two years told me he seems "stuck in neutral" and that their time together is stressful rather than joyful. "While I respect his right to retire, I am struggling to find a way to enjoy my own life. I have adjusted my schedule and tried every way I can think of to negotiate and communicate. I love him, but I need to be a person in my own right. Our marriage has suffered more in the past two years that it did in the previous 37."

Our 7 suggested tips to surviving retirement as a couple.

Whether you and your partner's plans for the future are 100 percent on the same page or totally out of sync, these suggestions will help you create a balancing act and happier future.

1. Take time to adjust to being retired. You don't have to do everything you have been planning the first month and be patient with each other, especially if you want to get up and go and he wants to sleep in without an alarm clock for a while.

2. Express yourself if your partner wants to do something that you don't. If you are used to accommodating just to keep the peace, it is not too late to change that.

3. Stay connected to the outside world by taking classes, joining clubs, volunteering or being involved in your community.

4. Negotiate sharing more household responsibility. If your partner didn't help with these duties before, suggest he start with the things you dislike the most and take it from there.

5. Stay active. Exercise, play sports, go to the gym and consider beginning each day with a walk together. It's good for your health and can be a nice ritual for discussing your plans for the day.

6. Make sure you each have enough "alone time" and respect each other's schedules.

7. Plan, but don't over-plan or over-schedule. Leave time to do the unexpected or to just hang out.

Chapter 19: Do You Know the New Retirement Mantra?

For years, you have been told that retirement planning is all about saving and investing. But that is not true anymore. In retirement, many people find a new career and delay Social Security.

Now is a good time for aging boomers to review their retirement savings. (As boomer myself; Boy, do we know how to have fun or what?) But if that is your primary focus for retirement planning, I think you need to rethink things.

That is because the new retirement planning mantra is. Get an encore job, network and delay filing for Social Security benefits.

Disappointing retirement funds.

For many of us boomers, poring over our retirement account statements is a discouraging exercise. The kitty may be slightly fuller than it was during the 2008 global financial meltdown, but the sum still seems pretty paltry.

The median balance in 401(k)s and IRAs for households approaching retirement is $120,000, according to the U.S Federal Reserve's 2010 Survey of Consumer Finances. That would provide only $575 in monthly income, assuming a couple purchased a joint-and-survivor annuity. (An annuity provides income for life and a joint-and-survivor clause means the payout continues until both spouses are dead.)

Over the past three decades, the baby boom generation has been taught to equate planning for retirement with savvy investing. In essence, the retirement mantra has been; stocks for the long haul, asset allocation and mutual funds.

The core of retirement planning today.

But deep down, we have always known we couldn't rely on Wall Street's lush promises of investment returns. It took two bear markets and two recessions in less than a decade for boomers to realize what many had sensed all along. The core of retirement planning isn't investing, it's what kind of work you did like to do as you get older.

Earning a pay cheque in retirement offers a number of financial advantages.

For one thing, assuming you are among the 99 percent of income-earners, what you will make at work (including temp jobs and short-term contract jobs) will dwarf whatever you might earn from investments.

For another, continuing to bring home an income lets you defer tapping into your tax-sheltered retirement savings. As a result, your money will compound for a longer period and need to last for fewer years.

You should be looking for the kind of jobs you could do that are challenging, interesting and offer an acceptable income. The time to do this is while you are working full-time.

How delaying social security helps.

A pay cheque in retirement also makes it practical to delay filing for Social Security benefits. That is one of the prudent financial moves you can make. In the U.S. the size of your cheques goes up smartly for every year you wait to file after age 62 up to age 70. (There are no extra bonus past 70.)

For instance, your Social Security benefits are increased by 6 percent for each year you delay claiming benefits from age 62 to 66. From ages 66 to 70 you will earn an extra 8 percent annually. Think you can match these returns by investing in stock and bonds?

The impact of waiting to take Social Security is especially powerful for older, low-wage employees.

The typical worker with an average salary of $30,000 can nearly double his or her annual retirement income from Social Security by staying on the job until age 70 rather than opting to retire and collect benefits at 62.

When the earnings test kicks-in.

Even if you claim Social Security starting at 62, you are allowed to earn quite a bit of employment income before the government snips the size of your benefits because of what is called the "earnings test." If you claim Social Security before the "normal retirement age" (between 65 and 67, depending on when you were born), $1 will be deducted from your benefits for every $2 you earn above the annual limit, which is $15,120 in 2013.

Bringing in an additional $15,000 or so can be a big help for anyone under pressure to supplement income.

Working longer isn't always possible.

That said, not everyone can work into their 60s and 70s.

Many jobs are physically debilitating, as anyone knows who has worked on a factory floor, operated a checkout counter or made hotel room beds. Laid-off workers in their late 50s and early 60s often find that employers have little interest in hiring someone their age.

How to start your research

The advice to work longer, if you can, means it pays to invest in your human capital by maintaining your skills or picking up some new ones and perhaps going back to school.

So this is a good time to start researching your future job options, from hiring a career coach or meeting with temp agencies.

How to make a living and a difference in the second half of Life.

Most important, invest in your network of family, friends, colleagues and acquaintances. Scholars have documented that, these days, about half or more of all hiring comes through referrals and networking with your connections. You may want to create new connections to find a job and ease the transition into the next stage of life.

The payoff for preparedness

The sooner you start getting ready for working in retirement, the better.

Let's say you have always dreamed of working on environmental causes in retirement, but you have never done anything like that. Now you are 65 or 70 and head toward an environmental organization you admire saying: "Here I am. How can I help you?" You might be told you could help out by doing some low-level volunteering, like answering the phones or getting the mailings out.

Now, take that same person who gets involved with several local environmental groups in his 40s or 50s. At age 70, he is a respected senior person there, valued and needed because he earned it and he could start pulling down a part-time pay cheque.

Chapter 20: Free Time in Retirement is a Myth

Imagine sitting in a comfortable rocking chair on a warm summer day, a frosty glass of lemonade at your side, the screen door at your back. Your neighbourhood goes about its business while you read a book; the only item on your to-do list that day.

Every so often, you hear something that makes you look up from the page; the mailman snapping a box shut; a child whooshing by on his/her bike; a pickup truck backing out of a driveway in a cloud of dust, rubber crunching on gravel.

It's the kind of day you might call aimless. Directionless. Indulgent. Some might even call it frivolous.

It's the kind of day we are supposed to have in retirement in theory. But, if you are retired, when was the last time you took a day like this without feeling guilty that you weren't accomplishing something?

The Truth: We are Still Busy!

I thought so. They are few and far between, and some of us are almost incapable of it.

"But I'm too busy! I have my grandkids, golf, shopping, not to mention repairs on the house and all the other things on my to-do list."

All our lives we have been judged and evaluated on what we have gotten done, on how many chores and tasks we have checked off our list, on our accomplishments.

We are proud of being "Type A" because the ability to juggle it all is considered a big achievement. Even in retirement, when we have earned our leisure, we are called "active retirees."

It's easy for all that activity to become the sum total of our lives. But is that how we want to live? Is it even good for us?

Starting a Front Porch Movement

I have got an idea. How about taking a day a week or even an afternoon for rockin' on the front porch? No need for a porch or a rocker. Just time to set aside all the "I should be doing this" and here is the radical part; do nothing.

Be aimless. Purposeless. Slow.

Page through a book. Scribble in a hard-copy journal. Sketch. Or do absolutely nothing but sit and watch the world.

If an "I should be…" thought arises, let it float out into the blue sky above. Today is your day to do absolutely nothing on your to-do list.

We need those front-porch moments to revive our bodies and our souls. The stress of completing a long task-list takes a toll on our bodies. Being in constant motion takes attention off our souls, too, which are tired mightily by the horrific things we see in the news every day.

So, pick a day; your day. Send everyone away to do his or her own thing, and take time to rock on your front porch, whether literal or metaphorical.

Hush…. what do you hear? I hope it's the welcome sound of nothing more important than the breeze lazily rustling leaves on trees!

Chapter 21: Time Management is Crucial to a Happy Retirement

For a happier retirement, the key isn't how much free time you have to spend, it's how you manage whatever free time you have.

That is the conclusion of a fascinating new study about time management in retirement I think is worth heeding.

Earlier research has found that leisure time is important for retirees, positively influencing their happiness and sense of peace, and that a lack of planning can lead to boredom.

But this was the first study I have seen that looked at the significance of managing that leisure time.

The Taiwanese researchers; Wei-Ching Wang of I-Shou University, and Chang-Yang Wu and Chung-Chi Wu of the National Pingtung University of Science and Technology studied 454 Taiwanese retirees to determine whether there was a link between how they managed their free time and their overall quality of life. (The retirees had an average of 8.3 hours of free time weekdays and 8.75 hours on the weekends, incidentally.)

The study's authors discovered that retirees with more free time were not happier than ones with less on their schedule. The "telling factor" was the way retirees used their idle hours.

Individuals who manage their free time well enjoy a higher quality of life, whereas those who gain free time but do not using it properly gain little benefit.

So how much Time Management is enough?

I worried that using free time "properly" might mean scheduling your days maniacally which, to my mind, is the antithesis of retirement.

Actually, the researchers said, astute time management wasn't about rigorously blocking out every minute of your day.

It was primarily about setting goals and priorities for your free time and then evaluating whether they were appropriate and achievable.

A goal could be as simple as I want to maintain relationships with others by joining in at least two recreational groups and programs.

Organizing your activities on a daily or weekly basis (not hourly) is also important.

It comes as no surprise to me that research shows having goals for our free time increases the quality of life when we are 50 plus. The key I think just as it is for our younger years is to be able to always create new goals and challenges.

We advise not getting tied up in knots over making the right leisure time choices. It's wonderful that we have so many options now, including things like encore careers, voluntourism and online learning and it may not be easy to narrow the possibilities, but that is okay. It's not a contest. We don't have to get it right the first time.

The freedom to structure one's day around passions and interests is what can make retirement so satisfying.

Figuring out a system that works.

When he retired, a friend of mine returned to his old ways and became "the master of the to-do list," with a fully structured schedule. "My daily calendar looked just like my work calendar: 15-30 minute blocks of time assigned to various tasks and activities," he wrote. He even scheduled time for napping.

"Surprise, surprise, this was a no-go," He said. "Not only did I feel pressured to meet a made-up schedule but I was doing most everything just so I could check it off the list."

He then tried a different approach; the wholly unstructured "go-with-the-flow system." Turned out, that was even worse. "Without a structure I didn't know what to do," he said.

Ultimately, he arrived at a happy medium, blending schedules, to-do lists and free-flow. He jots down tasks he hopes to tackle but gives himself the freedom to move things from that day's list "to tomorrow, next week or next month."

I like that approach and hope to adhere to it when I fully retire someday. Time will tell!

Chapter 22: You Don't Have to Be Rich to Retire Happy

In Fact, Far From It!

We all hope to "retire" someday.

Why did I put "retire" in quotes? Because most of us don't want the freedom to sit around and do nothing; instead we hope to have the freedom to do more of what we want to do and less of what we have to do.

Does that sound like a happy retirement? Of course it does.

But that kind of freedom comes with a price, right? Won't you need millions in assets and a six-figure annual income?

No. In order to rank among the happiest retirees, you will probably need a lot less in assets and income than you think.

While the traits we list below aren't intended to serve as a checklist; after all, we are all individuals; they can help you map out what you might need, both financially and emotionally, to increase your chances of being happy when you retire.

Here is a sampling of those traits and behaviours from a survey carried out in 2015 by a friend of mine.

1. Happy retirees averaged $97,000 in household income during their "peak" earning years. Unhappy retirees averaged $77,000.

Granted that is a fairly high income, but then again it is "household," not just one person and clearly a seven-figure income isn't a prerequisite.

2. Happy retirees average $82,000 in "current" household income.

Here is where it gets even more interesting. People who say they are "unhappy" average approximately $42,000 in retirement income; those who are "slightly happy" average $60,000. "Moderately happy" retirees average $72,000, and "very happy" retirees average just over $80,000.

So what does it take to be an "extremely happy" retiree? They average $90,000 in household retirement income. (Again not chump change, but household, not per capita.)

Happiness levels quickly plateau; the difference between being "moderately happy" and "very happy" is only $8,000 a year; the difference between "very happy" and "extremely happy" is only $10,000 a year.

Greater levels of income, while certainly nice, still result in rapidly diminishing returns, at least where happiness is concerned. (Possibly that is because everyone's definition of success is and should be different.)

3. Happy retirees have at least $500,000 in liquid net worth.

Of course those funds create a cushion (as well as generating income) but we feels there is a "psychological comfort" that comes from having a $500,000 safety net.

Interestingly, "moderately happy" retirees have right at $500,000 in liquid assets, but "very happy" and "extremely happy" retirees both report having significantly less than $600,000. More is better... but only by very small degrees.

4. Happy retirees own homes averaging $300,000.

A palatial estate may be nice... but it's not required.

5. Happy retirees don't have a mortgage... or are about to pay off their mortgage.

Happiness levels go up as mortgage balances go down. Not having a mortgage payment is not just liberating but owning your home outright provides a real sense of comfort and security. (and it frees up funds to be used for other purposes.)

So while, depending on a number of factors, paying off a mortgage early may not be the best decision in purely financial terms; there is definitely something to be said from an emotional point of view for knowing you own your home free and clear.

6. Happy retirees have two or three sources of retirement income.

Proceeds from the sale of a business, Social Security, 401(k)s and IRAs, pensions from old jobs, investment income, part-time jobs; there are a number of potential retirement income sources and the happiest retirees tend to have more income sources (not necessarily more income, but more income sources) than unhappy retirees.

After all, having your eggs in one basket means you worry a lot about that basket and worry breeds unhappiness.

7. Happy retirees have a well-defined understanding of their purpose in life.

Direction and meaning in life correlates strongly with happiness. Ninety-one percent of happy retirees are either "very" or "extremely" comfortable with their sense of purpose. Eighty-nine percent of unhappy retirees are either "slightly" or "not" comfortable with their sense of purpose.

Bottom line; happy people know what their money and their life is for.

8. Happy retirees have at least 3.5 core pursuits.

What is a "core pursuit"? An activity or interest you love to pursue. Core pursuits are fulfilling and gratifying; volunteering, travelling, teaching, sports... things that make you feel good about yourself and your life.

9. Happy retirees live in the city or suburbs.

Thirty-seven percent of unhappy retirees define where they live as "rural," which is over double the national average (only 16 percent of Americans live in rural areas.)

Why does where you live make a difference? Cities and suburbs have more people, meaning more opportunities to engage and interact with more people. Relationships are extremely important to everyone, but especially to retirees.

10. Happy retirees take at least two vacations each year.

They spend more on those vacations than unhappy retirees.

This is one instance where spending more money correlates to happiness, possible because travel is exciting and personally enriching and travel is to some degree social, too.

Bottom line; to be happy in retirement you don't need a ton of assets. Or a huge annual income. Or a big house. Those things are nice, but they won't make you happier.

You need enough to provide a sense of security... but after that it's what you do with your time not your money that will make you happy during retirement.

Which, if you think about it, is just as true now as it will be then.

Chapter 23: Balanced Life in Retirement

We begin our careers poor and eager. We come in early, work long hours, and make great sacrifices to become wealthy. "If only I could have $100,000 in the bank," we tell ourselves, "then I did be happy. If only I could pay off the mortgage and own my house free and clear; then all the pressure would be off me."

We make ourselves such promises. We imagine such happy futures. Then we set our shoulders to the grindstone and begin the long, daily push and one day we discover that we have paid off the mortgage and have $100,000 in the bank. But we don't stop working. We don't even think about it; because that $100,000 isn't enough.

So we keep on pushing and our bank account skyrockets. We now have more than a million dollars. Yet we continue to work, because by now our yearly "burn rate" is more than a quarter of a million dollars and even a million dollars in the bank is not enough.

Even at a 10% yield, it's giving us less than half of what we "need" to live and so we keep going. Then one day we take a look at our portfolio and see that our net worth is more than $10 million. "Surely that is enough to retire on," we think. But when we check our cheque books we find that our burn rate is now at $350,000 a year and that Uncle Sam and his stately cousins are eating up 50% of what we earn and that even $10 million isn't enough to last us if we live a good, long life.

So we work on again, pushing back the dream, telling ourselves, "Just a few more years, and then I will take it easy."

But what if that day never arrives? What if working becomes an addiction for you? Or you die suddenly and prematurely? You can avoid those horrible possibilities very easily. The secret to avoiding the addiction problem is to lead a balanced life. Leading a balanced life means having an interest (and setting goals for yourself) in four aspects of life:

1. Wealth (your business and your investments)

2. Health (mental and physical)

3. Wisdom (your intellectual pursuits)

4. Social interaction (your society, friends, and family)

People who can't retire or retire unhappily often lead unbalanced lives. Some neglect their social lives entirely and eventually lose the love and companionship of friends and family. Some neglect their intellectual lives and end up with minds that can find pleasure only in making money. Some neglect their health and become sick (or die), and thereby forfeit their dream.

We have talked and will continue to talk about wealth, wisdom, and social goals in other chapters of this book. For this chapter, let's focus on the wealth problem. How do you keep yourself from being addicted to making money? (I once asked a very wealthy mentor of mine why he was still working so hard when he is a multi-millionaire. He thought about it for a while. "I can't give you a good answer," he finally admitted. "I feel bored when I'm not working and I like the idea of making more and more money. I guess it's a way of keeping score." I am happy to report that he eventually recovered from his addiction and now leads a balanced life in retirement.

You can start by accepting this proposition. Making money is habit-forming. That is a good thing because it makes it easier to keep working. But it's a bad thing too because it makes it harder to stop when you want to stop.

What compounds the problem is that most people increase the cost of their lifestyles as quickly as they increase their income and then feel compelled to keep increasing their money-making goals. It gets to a point where even if they want to retire, and feel they could break free of their addiction to working, they don't see how they can do so, because their cost of living is so astronomically high.

I know dozens of successful businessmen who can't figure out how to sustain themselves on less than a half-million dollars a year of income. I know that is not a problem you have any sympathy for, but it's a problem for them and it may well be a problem for you one day.

Unless you do this.

Decide how wealthy you want to be and be as specific as possible. Let's say your goal is to have a net worth of $5 million with $4 million of that invested and giving you an income.

Recognizing that, at an average after-tax return of 5%, that $4 million is going to give you an annual cash flow of $200,000, you must make yourself a promise now that you will never let your lifestyle exceed that $200,000 mark.

In other words, the trick to staying out of the escalating-lifestyle snare is to decide beforehand the level of spending you need in order to be comfortable and never allow yourself to go beyond that even if you have a few years in which you are making so much money that you easily could.

Keeping with the same example, let's say you had a few years where you were earning $2 million a year. Your take-home would be about, say, half that. To keep yourself from accelerating your lifestyle, you did have to make sure that you spent only $200,000 and invested the rest.

You wouldn't move into a $5 million house. You wouldn't buy a $150,000 Porsche. You wouldn't take an $80,000 vacation. You did have a blast a $200,000 blast but that would be it.

If you don't make that promise and do slip into the common path of excessive consumption, you will surely have trouble retiring even after you have exceeded, by far, the financial goals you had set for yourself.

Okay, to reiterate, here is how to retire happily and avoid becoming addicted to work and making money:

Step 1: Set a net-worth target and then set income and business targets that will support it.

Step 2: Figure out exactly how you are going to be able to enjoy your life after you have reached your wealth-building target. Figure out just how much money you will need each year, and what you hope you will be doing to make your life happy and worthwhile.

Step 3: As you go about building your fortune, make sure that you never allow yourself to slip into a lifestyle that is more expensive than you really want. Don't let yourself be tugged into buying a bigger house than you really need, designer labels that don't really improve your appearance, expensive vacations that aren't any more fun than cheaper ones, high-priced wines that don't taste any better and so on.

If you can do all that work now and I mean draw it out in as much detail as possible you won't have to struggle with it later.

Chapter 24: Secrets to a Successful Retirement

A successful retirement today is often about re-creation, redefining who you are to make your future as meaningful as possible.

Beyond that, these are the 10 nuggets about successful retirements that stood out the most.

1. Find your passion: This is not always as simple as it sounds, however; you have to dig deep inside yourself to determine what excites your heart and soul. But once you discover your passion and decide to pursue it, you will have a reason to get out of bed every day.

2. Free fall creates a new freedom to be ourselves: Taking a leap of faith can help you let go of the past as you find out who you really are. We hopes people in retirement will be perennial flowers who "re-pot" themselves and bloom many times over the years.

3. Create a success inventory: The axiom "build on your strengths" applies to retirement as well as to the workplace. If you make a list of what you have accomplished so far, you may have a better idea of the kinds of things you want to do in your second act, particularly if you are thinking about looking for work in retirement. The success inventory will remind you of how awesome you really are.

4. You will see more opportunities when you prepare yourself to see them: Once you know what you want to do in retirement, begin your personal prep work by reading, listening and telling friends of your interest. The more opportunities you see; the greater your chances of making some of them work.

5. Push back against the limits you have set for yourself: A friend of mine once describe how his prison ministry work in retirement took him out of his comfort zone and offered fulfilment. If we take on new challenges and break through old definitions of ourselves, we may discover new purpose in our lives.

6. Embrace contradictions: Some days you will want to charge up the mountain; on others you will want to sit in contemplation under a tree. It's all part of the journey.

7. Add new tools to your belt: We believe that each new opportunity can feed your soul and that the experiences will deepen your sense of self.

8. Talk with your partner about what each of you wants out of retirement: Finding a way to discuss this next stage of life can take a lot of stress out of the relationship and lead to some creative possibilities, rather than just allowing things to happen by default.

9. Keep a green tree in your heart and perhaps the songbird will come: I love this Chinese proverb, "it means that if you continue to grow and feel alive in retirement, you will feel forever young."

10. Retirement is not an end, but a new beginning: For me, this bit of wisdom, from former President Jimmy Carter, exemplifies how we can make the most of our retirement years. After leaving the White House ("four years earlier than planned," he notes), he and his wife, Rosalynn, started the Carter Centre, volunteered for Habitat for Humanity and travelled the world to help resolve conflicts, advance human rights and assist developing countries. "While reaching out to others," he writes, "We filled our own needs to be challenged and to act as productive members of our global community."

Chapter 25: Ways to Retire Happy

When planning for retirement, most people worry over one basic question; how much money will I need to last until I die?

Some experts encourage us to save 10% of each pay cheque and pray for the best. Others say we should aim to save eight times our ending salary. Many of us still obsess over hitting that elusive million-dollar mark, despite the fact that fewer than one-third of Americans have managed to cobble together $1,000 for retirement.

I wanted to go beyond simple income numbers. I wondered what it really takes to get somebody to a point where they truly feel they have a cushion and they are also enjoying life.

In 2014, an online survey of more than 1,200 workers who had either already retired or were fewer than 10 years away from retirement was conducted. The researcher asked questions about what type of cars they drove, where they shopped, how much their homes were worth, and, of course, how much they had saved for retirement. But he also asked about their passion projects, how often they went on vacation, what types of volunteering they enjoyed, whether or not they were satisfied with their lives, and how much time they put into their retirement planning before calling it quits. (He did not ask participants about overall debt levels like student loans and credit cards, but did include questions about their mortgage debt).

What he found was that more money doesn't equate to more happiness. The happiest retirees didn't all drive BMWs or take 12 European cruises a year, either.

Here is what it takes to be a happy retiree.

1. Retirees' happiness hit a wall once they reach $500,000 in savings.

The financial barrier separating an unhappy retiree from a happy retiree seemed to be right around the $500,000 mark. In his research, happiness levels skyrocketed from retirees who had saved $100,000 and those with $500,000. But after hitting that half-million-dollar milestone, happiness levels plateaued even as net worth rose. The same plateau effect appeared when he asked retirees how much they spent each month. On average, unhappy retirees spent less than $3,000 a month. Happiness increased by 25% between the unhappy group and those who said they were "moderately happy" and spent about $4,000 a month. But after that, there was only a 6% increase in happiness levels between moderately happy retirees and extremely happy retirees, who spent more than $4,500 a month.

2. Happy retirees fill their time with three to four "core pursuits."

He jokingly defines core pursuits as "hobbies on steroids" the kinds of activities that fill retirees' time when they are no longer working 9 to 5. On average, happy retirees participated in almost twice as many core pursuits than their unhappy counterparts; 3.6 vs. 1.9. Happy retirees were also more likely to pick core pursuits that were socially engaging, such as volunteering with nonprofits and sports.

3. Happy retirees pay off their mortgage early.

In his research, Moss found happy retirees were nearly four times more likely than unhappy retirees to be close to paying off their mortgage. More than one-third of happy retirees will have their mortgage paid off within eight years, compared to less than one-quarter of unhappy retirees. Nearly 30% of happy retirees said their mortgage payoff date is less than five years off, compared to just 5.6% of the unhappy sect. Any retiree who is managed to pay off their mortgage debt should be thrilled; more seniors today are carrying mortgage debt in retirement than ever before.

To me, this was kind of a real eye opener. You hear all day long that there is no reason to pay off a mortgage early and you can make a great economic case for that. But our research shows the elimination of mortgage is really important, not just financially but also psychologically. Happy retirees weren't all living in mansions either; the average value of their homes was $355,000 not far above the national average of $319,200. Unhappy retirees' homes were worth $273,000 on average.

4. Happy retirees have at least two to three sources of income in retirement.

On average, the happiest retirees reported having between two and three different source of income; the most commonly cited income sources were Social Security, investment income, real estate income, a pension, and part-time work; while unhappy retirees had between one and two. I am a huge believer in getting as many tributaries of income flowing into that main retirement income stream as possible.

5. Happy retirees are masters of the middle.

On average, happy retirees live off of just over $53,000 a year not too far off the national household income of $51,000.

He also found that they aren't overly interested in luxury brands. The unhappiest were more likely to drive a BMW, while happy retirees preferred Lexus. Moss calculated that over five years, owning a Lexus cost 16% less than a BMW. Happy retirees' shopping tastes were also relatively modest, with the majority saying they preferred middle-of-the-road department stores, like Kohl's and Macy's over Neiman Marcus or Saks. They are masters of the middle.

6. Happy retirees spent at least five hours a year planning for retirement.

Unsurprisingly, the happiest retirees were the ones who planned well for their golden years, spending at least five hours a year preparing. Nearly half (44%) of unhappy retirees said they weren't satisfied with how much thought they put into retirement. Five hours a year may not seem like much (Moss says most happy retirees spent more than that), but once you have set up a solid financial planning framework, the truly time-consuming part is basically over. From that point on, it's all about checking in with your goals and maintaining your strategy. Retirement planning is a long-term proposition. It takes a couple of weekends a year to stay on track. You can gain a lot of grown by maintaining that garden.

7. Happy retirees are more likely to be married.

As common as divorce is in the U.S. today, the overwhelming majority of happy retirees were married (76%) and only 9% were divorced. Less than half of unhappy retirees were married, while one-quarter were divorced. This is right on par with what past research has shown about levels of satisfaction in married and unmarried people over the long term, married couples are much happier. It's fairly obvious why two may be better than one in this scenario; dual incomes can make a huge difference in a couple's financial outlook. On the flip side, divorce not only reduces both parties' income but is also expensive to go through.

Chapter 26: Best Places to Retire in South America

With spiralling costs compelling more and more North Americans and Europeans to retire overseas, retiring abroad has never been more attractive. But finding the right location among the myriad options available can be daunting. That is what this chapter will help you with. Using input from experts on the ground all over the world, we combine real-world insights about climate, health care, cost of living, and much more to draw up a comprehensive list of the best places for your retirement destinations on the planet.

Take into account, too, that ultimately no list or formula can automatically deliver the best destination for you. Only you can decide that. Only you can assess your personal preferences, needs, budget, and desires, and look at the options available to see which nation best suits your needs.

Are you an urbanite or do you prefer the wide-open spaces? Would you prefer a tropical climate with year-round sun or more temperate weather that reminds you of home? Would you rather live by the sea or on a mountainside? Sample the exotic delights of Asia or explore the rich cultural heritage of Latin America?

Only you can make these calls. In assembling this information, we aim to deliver an in-depth guide to the best countries available to you today. It's been compiled using the solid judgment and on-the-ground intelligence of experts around the world. All of them are experts who have become experts on their adopted countries. Through their insight, we hope to give you an indication of the relative strengths and weaknesses of each local and a flavour of the life that could await you in each. That way you can focus your own search in a well-informed way.

Ecuador: The World's Number 1 Retirement Haven

From the quaint town of Cotacachi to the vibrant capital, Quito, from Salinas by the sea to the peaks of the Andes, Ecuador's diversity is a key part of the massive appeal that sees it regain the coveted top spot on our retirement havens.

Although prices have risen slightly in recent years, Ecuador's real estate is still the best value you will find anywhere.

This is bolstered by the generous array of benefits the government has afforded to retirees. Over-65s get discounts on flights originating in Ecuador, as well as up to 50% off entry to movies and sporting events. Discounts are also available on public transport (50%) and utilities, with the option of a free landline if you purchase a property.

Cost of living is low. You can get a lot more in Ecuador for your dollar than you could in the U.S. or Canada. A doctor's visit will set you back around $10, while a main course in a restaurant can be had for as little as $2.50. The bus trip from Cotacachi to Otavalo will cost you 25 cents. For big-ticket items like real estate, you can get a lot more for your dollar here than in the U.S. A couple can live well here on $1,400 a month, including rent.

You will find world-class medical facilities in big cities throughout the country, and you can catch direct flights to and from the States in Quito and Guayaquil. Good Internet is more readily available than ever. Public transportation is so efficient that many experts report not having to even buy a car and with Ecuador having one of the most robust economies on the continent; its Gross Domestic Product has grown an average of 4.54% a year since 2000; it is likely that this infrastructure is only going to improve over the coming years.

The steadily growing expert population makes it easy to integrate, as do the friendly locals. Many of the locals are somewhat bilingual, and they are very welcoming toward North Americans and Europeans and there is a steadily growing expert community in Ecuador.

When it comes to entertainment, Ecuador offers a diverse range of options. Biking, fishing, zip-lining, hiking, and rock-climbing are all popular and readily available. The country's location affords it access to a staggering variety of environments, from the vast Pacific Ocean (including the Galapagos Islands, one of the world's most important ecological sites) and the Amazon to the mighty peaks of the Andes. This diversity ensures you are guaranteed to find a climate that suits you down to the ground.

The country's heritage is writ large in its culture, fusing indigenous influences with various European and African peoples who have settled there over the centuries. This multitude of cultures inevitably influences Ecuadorian cuisine, which is as varied as it is delicious and affordable, with new and reputable restaurants springing up all the time.

As many experts note, Ecuador delivers fresh experiences every day, making it the perfect location for someone in search of a happy and fulfilling life overseas.

Colombia: Latin America's Health Care Hotspot

For North Americans heading south, Colombia is becoming an increasingly popular choice. Given all that this diverse country has to offer, it's not difficult to see why.

Second only to Ecuador among South American nations. Colombia has an incredibly low cost of living; a couple can live comfortably on just over $1,200 a month.

What is more, Colombia boasts one of the finest and most affordable health care systems in the region, a factor that has seen large expert communities sprout up in cities like Bogotá and Medellín.

You can get health-care treatment comparable to that in the U.S. in any large or mid-sized city. In a 2014 survey, 18 Colombian medical institutions ranked among the top 45 in Latin America. According to the World Health Organization, Colombia actually has better health care than the United States or Canada.

There is no shortage of things to do, either and accessing the country has never been easier, thanks to an increase in direct flights from the United States of America.

Even small towns have community swimming pools and tennis courts, and some major cities have golf courses. In Colombia, you can go hiking, white-water rafting, paragliding, mountain climbing, spelunking, swimming, water skiing, and scuba diving. Colombia is the second-most bio-diverse country on the planet. It has beaches, jungles, deserts, and a few steamy volcanoes. You will never get bored in Colombia.

Chapter 27: Best Places to Retire in North and Central America

Panama: Best Retirement Benefits in the World.

Runner-up in our rating and the best retirement destination in Central America. Panama offers retiree experts the advantages of the world's best retirement program. the Pensionado visa.

Panama wants you to come and their policies court you. The Pensionado visa is available to anyone with a lifetime pension of over $1,000 a month. Discounts you can get with the visa include 20% off medical services, 50% off entertainment, 25% off restaurant meals, 25% off air fare, and 25% off electricity and phone bills."

Add all this to the country's already low cost of living, and Panama is the very definition of an affordable expert haven. For under $2,000, a couple can live comfortably in a country with a well-earned reputation for being expert-friendly.

Thriving expert communities in towns such as Boquete, Coronado, and Pedasí attest to the ease of integration and afford you plenty of opportunities to meet like-minded types.

There are active expert communities all over Panama. This is possibly the friendliest country toward North Americans, because of its long-standing relationship with the U.S. There are so many activities for experts and Panamanians, it is easy to join different groups and get out there and start meeting people. Panamanians like to meet foreigners. They like to try to practice their English on you or hear you trying to speak Spanish. You even make friends at the supermarket.

Although a developing nation, Panama's array of infrastructure makes it easy to get what you need. It has both the fastest Internet and best roads in Central America, and it serves as the air hub for the entire region, with a large and growing number of routes serving U.S. and Canadian cities. This makes Panama one of the easiest countries on our list to get back home to U.S. from.

The Pacific coast of Panama is world-renowned for its beautiful beaches and azure waters; the definition of tropical paradise.

Sunshine is ubiquitous in Panama and gray days are rare. The evenings and mornings are pleasantly cool, and rains rarely last more than an hour. At either extreme, the weather is perfectly manageable. The temperature is generally warm, but not so hot as to be stifling, and the ocean water reflects this, making Panama a perfect place if you love to swim. Unlike some other countries in the region, hurricanes do not pose a threat.

This favourable climate makes Panama a perfect place for those who love the outdoors, with plenty of opportunities for hiking, bird-watching, fishing (among the best in the world), and water sports. It also has a vibrant arts and cultural scene centered on the larger towns and cities.

The John Hopkins-affiliated Punta Pacífica Hospital in Panama City provides care comparable to what you did receive in the U.S. It's one of five major hospitals spread throughout the country, although smaller facilities also provide first-rate service at highly competitive prices. Because of its small size, you are never more than an hour's drive from a medical facility in Panama. The local health-care system is both cheap and reputable. A visit to the doctor can set you back as little as $5.

Mexico: Thriving Expert Communities South of the Rio Grande

One of the world's best expert havens lies just south of the border, proving that you don't have to traverse the globe to find your own piece of paradise. Due to its proximity to the U.S., the comforts of home are never far away in Mexico. English is widely spoken in expert havens (though Spanish will help tremendously) and U.S. food, products, and sports are also popular.

In Mexico you can get almost anything you could get back home, between the U.S. chain stores and the local shops and markets plus you can get all the wonderful local specialties. The big difference is the prices. Tickets to a top-notch concert may cost you $8 or even less…and you can walk to the concert hall through a beautiful colonial city. You can buy a week's worth of groceries for $15 or $20, and you don't know anyone who pays more than a few hundred dollars a year in property taxes.

Established expert havens in communities such as Puerto Vallarta and San Miguel de Allende ease the integration process, while excellent property can still be found for far less than you did pay in the States. In communities where experts flock, health care is as good as what you did expect in the U.S. but delivered at a much lower cost, leaving you with plenty of money in your wallet to enjoy the innumerable activities and cultural treasures this large and diverse country has to offer.

From the pristine beaches of Puerto Vallarta and the scenic streets of San Miguel de Allende to the Mayan ruins of the Yucatán, Mexico has it all.

This country can cater to a wide range of tastes whether you are in search of a quiet getaway or on the hunt for adventure. The country's large size also affords it a diverse range of climates to accommodate every tolerance of heat, humidity, and rainfall. Good Internet and infrastructure can be found throughout most of the country, and Mexico's famed cuisine is another much-loved plus. Regular flights to and from the U.S. are also a distinct advantage or you could drive home if so inclined.

Chapter 28: Best Places to Retire in Asia

Malaysia: Great Value for Money in a Cultural Melting Pot

Every year, more and more experts are waking up to the amazing opportunities Malaysia has to offer. The country has one of the most robust economies in Asia, and this is reflected in the consistently high standard of living available to locals and experts alike. It's just one of many factors that led to it being ranked the highest Asian retirement nation in this book.

Quality of life in Malaysia is cost-efficient as well as excellent. In typical expert locations such as Kuala Lumpur and Penang, high-quality real estate is available for rent at a low cost. Why buy when you can rent a 1,600-square-foot apartment with a swimming pool for just $850 a month?

On a modest budget, you truly can savour a life of luxury in Malaysia. With your money going further, you can afford to treat yourself to the stunning array of local food which mirrors Malaysia's diverse cultural make-up. For as little as $5, you can enjoy an excellent meal, with a bottle of wine setting you back the same price. The street food is similarly scrumptious and one of the true charms of Malaysian cuisine.

A friend of mine rent a 1,600-square-foot apartment with an amazing pool, just five minutes' walk from the ritzy Gurney Plaza shopping mall," says "It costs him just $850 a month. He did not need a car, either, so he is saving money left, right, and centre.

He love the weather; 82F on average and the ease of getting to Thailand, Cambodia, Vietnam, and Laos. When he combine that with a cost of living of $1,500 per month, including his rent, it's almost unbeatable.

The country makes a perfect base from which you can explore the innumerable natural, historical, and cultural treasures that Southeast Asia has to offer. The proliferation of cheap Asian airlines in recent years has made it easier (and more affordable) than ever to explore Thailand, Indonesia, India, and Japan. In Malaysia, Asia is truly at your doorstep.

Direct flights to the U.S. and Europe are also available, so getting home for the holidays needn't be a concern. Neither is Internet access, as every year high-speed Internet makes more and more inroads into the country. It's already widely and cheaply available in popular expert destinations like Kuala Lumpur and Penang.

As a throwback to the British colonial period, English is widely spoken by locals, making it all the easier to adjust and find your way around and cities like Penang have plenty of social occasions and festivities for you to enjoy, perfect opportunities to mingle with locals and experts alike because of its easy mix of the archaic and modern, Malaysia has been described by experts as stepping back in time, yet with all the benefits of modern comforts. Twenty-first century conveniences abound, but Malaysia holds onto enough of its Old-World, Asian charm to make it a real haven for those eager to experience new cultures and traditions. The public transport network is comprehensive; you don't need a car, particularly in the cities and the quality of the roads is first-rate, so if you do decide to invest in a vehicle, dirt tracks won't be an issue. Health care quality is similarly top-notch, particularly in the larger cities, where it is comparable to that in any First-World nation. A doctor's appointment will set you back as little as $15.

Thailand: Low-Cost Health Care and Lots to Do

As Asia's appeal to North American and Europeans; experts continues to grow, Thailand has become a popular destination. The country combines the best of authentic Asian cuisine and culture with enough North American influences to help you feel at home.

Thriving expert communities already exist in the larger cities, such as Bangkok and Chiang Mai, and resort areas, such as Phuket and Hua Hin. The Thai people are also well-known for their welcoming and accepting nature, their hospitality readily extended to experts. In Chiang Mai, it is easy to make friends if you make the effort. There are lots of opportunities to get involved with both locals and other experts. There is a large expert community in Chiang Mai, with a Chiang Mai Expert Club that meets monthly, as well as many expert clubs that get together weekly. Whatever your interest, from computers to hiking to motorcycles, there is a group dedicated to that hobby!

The choice of restaurants and dining spots is vast in Thailand, and there are much else besides to immerse yourself in. Choices for concerts, gigs, and exhibitions abound in Bangkok, and Chiang Mai has a huge art scene.

There is very little that you cannot find here in terms of cuisine, whether you are looking for a small bistro or a five-star dining experience. There are many art exhibitions on a regular basis and lots of concerts. Chiang Mai has a large arts community as a result of the universities.

But culture isn't the only draw. The country is an outdoor-lover's paradise, with a rich mosaic of rainforests, exotic wildlife, and breathtaking temples. On islands such as Koh Samui, Thailand also boasts some of the most beautiful tropical beaches you will find anywhere in the world, with properties available at highly affordable prices. But then, affordable homes and a relatively low cost of living can be found right across Thailand. Even in the likes of Chiang Mai, a couple can live comfortably on a modest budget of $1,500 a month.

Excellent health care is available throughout the country, but the best care to be had is in the city centres, especially in Bangkok. Basic doctor's visits and dental procedures (such as cleanings and fillings) can cost as little as $30, while a basic health insurance plan starts at around $300.

Chapter 29: Best Places to Retire in Europe

Spain: Europe's Most Affordable Retirement Haven

For those seeking sun and affordable living in Europe, Spain remains by far the best option available.

Spain is a great favourite with many people. It has the rich history and traditions that you expect from Europe, and all the First-World conveniences. But it also has a fun-loving, late-night culture, wonderful food, and people who place great value on family and friendships, and that is very appealing.

Although not as cheap as in most of Latin America, property in Spain is often of a high standard and far better value than in many other European countries. Likewise, Spain's cost of living is lower than what you find in much of Europe. A couple can live comfortably in many cities in Spain for about $2,600 a month, including rent, making Spain a great warm-weather, low cost choice for anyone who wants to spend time in Europe.

For years, Spain's famously warm climate has been attracting experts from colder climes. So if it's sun you are after, you can do much worse. The aptly named Costa del Sol ("Coast of the Sun"), a 100-mile stretch along Spain's southern Mediterranean coast, is blessed with some of the best summers (and beaches) in the world. But even the more northern reaches of the country (such as Catalonia and parts of the northwest coast) provide tee-shirts-and-shorts weather late into the year. Winters in these areas are never worse than mild.

Spain is truly a country that has it all. Whether you want to dine like royalty in San Sebastián, ski in the Pyrenees, run with the bulls in Pamplona, explore museums in Barcelona, hit the beach in Alicante, or wander Moorish palaces in Granada, Spain delivers. Spain is incredibly diverse, with something to suit everyone.

Spain's people, cityscapes, and famed food draw influence from the many groups who have settled there over the centuries; Basques, Moors, Celts, Catalans, and others, with each region flavoured by its own identity. It all guarantees you have plenty to see and do.

For lovers of wide-open spaces, Spain's vast, photogenic landscapes are a hiker's heaven. Owing to its location at the meeting point of Eurasia and Africa, it also boasts some of the best bird-watching on the planet. Each season brings different feathered treasures, as they migrate from one continent to the other.

All the First-World amenities you would expect of a European country are abundant in Spain. The Internet is reliable and fast, with coverage everywhere. Public transport is so efficient that you only need a car in the most remote regions. Home comforts - U.S. television, movies, and music are easy to come by, too.

Spain's health-care system is routinely recognized by the World Health Organization as one of the best in the world.

Malta: The Mediterranean's Hidden Treasure

Sitting right at the heart of the Mediterranean, Malta blends the best of southern-European graciousness with one of the best qualities of life to be found in Europe. First-World standards of service and infrastructure, a wealth of historical and architectural treasures from its eons of history (including nine UNESCO World Heritage Sites), world-class golf courses, and the sparkling Mediterranean; all in a country one-tenth the size of Rhode Island; ensure that this tiny island will keep you occupied.

Malta is small, but it packs a lot into that space; ancient ruins, charming cities, some beautiful beaches, and a varied, interesting population. In Valletta, the capital, there is something going on almost every night; for instance, a concert, a fireworks display or an exhibition. So you are never bored.

Owing to its time as a British colony, locals speak fluent English which, together with their warm and welcoming attitude, makes for easy integration. Malta enjoys abundant sunshine year-round, on top of world-class health care (consistently ranked among the top five in the world by the World Health Organization) and tasty Mediterranean cuisine. The island also has one of the lowest crime rates to be found anywhere. Malta may be one of the more expensive locations in this book in terms of real estate, but bargains can be found if you are willing to shop shrewdly.

You can still find comfortable apartments in beach areas, or even right in Valletta, for under $175,000.

Due to its small size and excellent public transport network, getting around and seeing the sights is easy. Malta also makes an excellent base from which to explore the wider Mediterranean region.

Safety in the World's Best Retirement Havens

It goes without saying that safety is a fundamental reason why the destinations discussed in this book made the shortlist in the first place.

We recommend destinations we feel are safe. If we ourselves don't feel comfortable in a place, we don't send our readers there. Every place you will find recommended in this book we know from firsthand experience. These are all places our experts have travelled to extensively or (much more likely) lived in.

But we are not naïve; nowhere in the world is completely exempt from crime. Wherever you decide to visit or move to, take the same common-sense precautions you would at home or anywhere else. If you would not dangle an expensive camera or tablet in downtown Detroit of London, then apply the same logic on the streets of Bangkok or Panama City. The less you flash your wealth, the less likely you are to attract attention. Similarly, walking alone through unfamiliar inner-city areas at night; whether you are in Kansas City or Quito, Baltimore or Bangkok, Dallas or Paris is rarely a good idea.

In short, take basic steps to reduce your risk of experiencing crime, and you can enjoy a thoroughly rewarding expert experience wherever you go. Thousands of people from all walks of life already are doing so.

Chapter 30: Should you Rent or Buy a Home in Retirement?

Deciding whether to rent or buy a home was never an easy question for my parents. Now age 83 and 84, they always treated homeownership as sacrosanct. Not only was owning their home a symbol of success, but it provided a haven that offered security and comfort.

But when my parents recently left the home they owned for 45 years to move near my sister, they opted to rent and after decades of do-it-and-pay-for-it-yourself, they are finding surprise! that it's nice to have someone else handle the landscaping and call in the plumber.

My wife and I might do the same in retirement and as I am learning, though some factors in the decision to rent or buy are the same at any age, others take on more significance in retirement.

A first consideration is how long you expect to live in your new residence. Just because you are retired doesn't mean you will stay in your new digs. Down the road, you might want something smaller or more accommodating to a disability.

But the shorter the stay, the less financially attractive owning a home in retirement becomes. For one, you will have to spread points and other closing costs over less time. If you finance, you are likely to have little new equity to show because you will pay so much in interest in a mortgage's first years.

For that reason, if you are retired, you should rent your home if you don't expect to stay more than three or four years. The last thing we would want is where you have paid the closing costs and then you are just not happy.

What does owning really cost?

Assuming you can determine the minimum time you will stay in a new home, you can then compare the costs of homeownership and renting. Early retiree friend of mine provides an analysis. He took a hypothetical $300,000 home in his Tennessee town and added up its expected maintenance and repair costs, property taxes, and homeowners insurance, then figured in the opportunity cost; what his money could earn in stocks and bonds if it wasn't tied up in home equity.

He estimated, effective cost of homeownership over a 10-year period was $834 per month for every $100,000 of a home's value. In other words, a $300,000 home would generate $834 x 3, or about $2,500 per month in ownership costs. If a retiree could find a comparable property to rent for less than $2,500 per month, he should rent.

Online mortgage calculators can personalize calculations like that for you. The New York Times' sophisticated rent-vs.-buy tool is among the better ones I have seen.

Get a mortgage or not?

The Times' tool and my friend's calculations also consider the impact of buying a home outright vs. getting a mortgage. If you can stomach holding on to debt late in life, you might benefit from getting a mortgage and investing in stocks, bonds, and other holdings rather than paying for your home outright. The National Association of Realtors says that since 1968 (when it began tracking real-estate inflation) through 2013, single-family home prices have increased 5.3 percent annually on average. In that same period, 10-year Treasury bonds returned an average 7.4 percent annually (neither figure accounts for inflation).

Of course, future stock, bond, and real-estate markets won't necessarily act as they have historically. Point is, the opportunity cost could be greater if you tie up money in a home rather than taking out a mortgage.

I can't speak of mortgages without mentioning the federal tax deduction on mortgage interest. It's often held up to justify owning. But it may be worth less if your retirement income puts you in a lower tax bracket than when you were working. (Income from required minimum distributions also can raise you to a higher tax bracket.)

Don't overlook the intangibles

Other, non-monetary factors may dominate your decision. If your pug requires a backyard lair or you will feel lost without a home-improvement project, you will want to buy or find an owner who is okay with your tinkering!

Good Luck!!