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Pre-retirement programs help ease transition

Florence Ulgiati, employment manager at the Xerox marketing group in Rochester, N.Y., is not ready to retire yet - not for a decade, at least. But the pre-retirement seminar for Xerox employees she took a year ago was a real eye-opener. According to her computerized pension profile, she could afford to ''retire at 112,'' joked Ms. Ulgiati.

Since the seminar, she has consulted a private financial planner, and on his recommendation has started a payroll savings plan and is investigating tax shelters. Ms. Ulgiati is not unusual. Many companies have pre-retirement programs that help their employees figure out how much income will be needed for retirement, new activities to deal with their increased leisure time, and if desired, a second career.

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In the last 10 to 15 years, 40 percent of the Fortune 500 companies have been offering early retirement inducements as an alternative to layoffs and as a method of opening up higher-level jobs for younger workers.

The option to take early retirement usually springs up suddenly, catching people with many unanswered questions, observes Richard Garnitz of Lifespan Services Inc., in Atlanta, which conducts pre-retirement seminars for Fortune 500 companies. People often start serious planning for retirement when they reach 55 or 60, never suspecting that 55 may be too late. Retirement planning is part of financial planning, he continues, and it is just as important at 35 as at 55.

Ms. Ulgiati agrees. She figured out how much money she needed each month in retirement. This is usually about 75 percent of pre-retirement monthly income, allowing for less work-related clothing and transportation expense, and lower tax brackets for people over 65, notes Jerry S. Rosenbloom, professor of insurance at Wharton School of Business, University of Pennsylvania.

With the help of a private financial planner, Ms. Ulgiati defined her other financial objectives. Long-term, she wanted to buy some property in Florida or on the North Carolina coastline, so she added that on to the amount needed to maintain her present life style. Then she figured out what social security and her pension would contribute. If she retires before age 62, she will have to plan an income to bridge that gap between the time of retirement and age 62, when she could begin receiving reduced (pre-65 retirement) social security benefits. The savings plan recommended by her financial planner, along with her existing individual retirement account, will provide the rest.

Although it is wise to plan financial details, many people are overly concerned with only the financial part of the planning, contends Mr. Garnitz. The most difficult questions are the ones least likely to be asked: What do I really want to do with my time; how can I reacclimate myself to spending more time with my spouse?

Or, if one wants to start a second career, he should ask himself: How marketable am I at 62; what do I have to do to acquire the skills I need?

As people are living longer and more active lives after retirement, those that don't take well to leisure should think about alternate employment, notes Thomas Leavitt, a researcher at Brandeis University's policy center on aging. But where should you look for a second career? How about looking no farther than your old desk? Some retirees act as consultants just a couple of days a week for their old company, observes Mr. Rosenbloom. Others always wanted to go into business for themselves and use their newly acquired free time to start a small hardware store or consulting firm.

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John D. Wallace of Columbus, Ohio, started thinking about this a few years before his retirement in September 1983. Now, on some mornings when he gets up, Mr. Wallace strolls into his living room, where he and his wife grind out income statements for small companies on their IBM PC. Roughly half of his time, however, he works as a compensation and benefits adviser at Battelle Memorial Institute, a Columbus research company where he retired after 37 years.

Before retiring, he took accounting courses that not only applied to his job at the time but also prepared him for his public accountant license.

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