Relinquishing your work responsibilities and entering retirement can be a challenging phase, especially for small business owners. Making smart financial decisions will help you ease the transition into retirement. Here are five decisions you should make before starting the next chapter in your life.

1. Working During Retirement

Some retirees continue working part-time to occupy some of their free time and maintain a steady source of income. People who work during retirement tend to be more physically and socially active, which can help your long-term health.

If you want to work during retirement, you should start looking into options before quitting your current job. Consider what type of work you want to do. Do you want to try something new or have a career encore? How many hours would you prefer? Can a friend or family member help you find a position?

You don’t want to burn all of your bridges or limit your opportunities when you start retirement. Keep your options open and stay on the lookout for interesting job openings.

2. Spending Plan

The key ingredient to a successful retirement is having enough money to live comfortably and stress-free. Calculate how much income you’ll need to maintain your retirement lifestyle. It will likely take you the better part of a year to reach an accurate estimate, so you should start sooner rather than later. Write down all of your monthly expenses, both fixed and variable. Make sure you include any vacation or travel plans, 

You may have to sell larger assets or tighten your budget to make things work, but that’s why planning in advance is so important. You must sort out these details now to ensure that you’re financially ready for a prosperous retirement.

3. Post-Employment Healthcare

If you retire after turning 65, you don’t need to worry about healthcare because Medicaid has you covered. But if your retirement is earlier, you must make a decision about your post-employment healthcare. Some people even delay their retirement just so they can avoid this decision.

Still, under-65 retirees have options. You can browse the federal Healthcare Insurance Marketplace, hold onto your employer’s coverage through COBRA insurance, or get coverage from another job after you retire. Healthcare gets more important as you get older, so don’t waste another day. Identify your coverage options and determine the best route.

4. Social Security Benefits

Deciding when you’ll take social security benefits will impact your financial situation for years to come. Your payments will vary based on your age and well-being. Experts recommend you start taking payments as late as possible, assuming you start retirement at a reasonable age and are still healthy. The longer you delay taking social security, the more money you may receive.

Not all situations are alike, but it’s usually better to spend from your 401(k) for the first few years and stretch out your savings to get a bigger boost later in retirement. Evaluate your financial situation and see if you can afford to wait.

5. Portfolio Adjustments

Your portfolio needs to last you for up to 30 years or longer. Unless you’re 100% confident in your savings, you should make some pre-retirement adjustments to allow for consistent withdrawals. Identify a withdrawal rate that will make sure you don’t outlive your savings. Three to four percent is the benchmark for most people, but inflation and lower returns might force you to lower the rate.

Since the economy is in a downturn, you must also work harder to allocate your assets so you don’t sell your investments at a loss. You don’t have to turn your assets over to a financial planner, but talking to an advisor might help you determine what adjustments you need to make.

Start Your Retirement Strong

Retirement can be a financially and emotionally challenging transition, but that doesn’t mean you have to start in the dark. Keep your employment options open, establish a new spending plan, determine your best healthcare and social security choices and make the necessary portfolio adjustments to ensure your savings will last. These decisions will help you start your retirement strong and live your older years in peace.