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Preparing for transition? Here are four tips for the new retirement landscape

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A recent study found that 67 percent of middle-income baby boomers are expecting a retirement that is different from the one their parents enjoyed.

The study, performed by the Bankers Life & Casualty Company Center for a Secure Retirement, found that roughly 75 percent of the generation born between 1946 and 1964 believe that financial factors, not their age, will determine when they will retire. Despite the uncertainty, more than half are looking forward to retirement.

If you're trying to navigate the new retirement landscape, here is some key advice.

Be prepared to be the decision-maker

In the past, workers had little input regarding their retirement or health care choices. Employers provided specific benefits, and employees generally counted on defined and reliable pension and health care coverage.

That has all changed. Workers now have more options, but they also have greater responsibility — and costs.

You may find yourself faced with choices about how much to set aside in a health savings or medical spending account or about which Medicare supplement plan to select. Retirement options, such as 401(k) plans and other tax-advantaged opportunities, also provide an array of sometimes confusing choices.

Your CPA can explain your options and help you with your concerns.

Planning is more important

The choices and responsibilities make it more critical than ever to have a realistic sense of your financial situation and whether you're ready for retirement. According to the study, about half of middle-income boomers aren't certain they will have enough in savings to guarantee a comfortable retirement.

If you're not sure where you stand, you can begin by using the tools on the 360 Degrees of Financial Literacy website, a public service of the CPA profession. The site's retirement pension planner, for example, helps you to estimate your savings needs based on factors such as your current age, income, savings rate and expected retirement age. Articles on the site also walk you through retirement and estate planning basics.

You may learn that you're running a bit behind in your savings if you want to reach your retirement goal, but finding this out early can help you consider your options and take the steps you need to get back on track.

Get ready to work longer

There was a 101 percent jump in the number of people 65 and older in the workforce between 1977 and 2007, according to the Bureau of Labor Statistics.

There may be numerous reasons for that change, including losses to retirement savings suffered during the recession as well as changing attitudes about work among those of retirement age. That means you may have to adjust your career expectations if your work life is going to last longer than you thought.

Make the most of your opportunities

Given the new retirement realities, it's especially important to take advantage of any options that will maximize your situation.

That means, among other things, that you should make full contributions to company retirement plans that offer a matching employer contribution. If you don't, you're missing out on free additions to your nest egg.

On the other side of the coin, avoid dipping into your retirement account, particularly if it means a penalty for early withdrawal. The longer the money stays in the account, the more time it will have to earn interest or dividends.

To learn more about Pennsylvania Institute of Certified Public Accountants (PICPA), visit www.ineedacpa.org.

Write to the Editorial Department at editorial@cpbj.com

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