The six toughest retirement decisions

For past generations, planning for retirement was a relatively simple process. When someone reached retirement age, they threw a party, turned the job over to someone else and went home to live on their pension.

Retirement planning nowadays is a radically different proposition that involves asset allocation, transfers and distributions and a series of life choices. There are several tough decisions that most people must make when they stop working. The most difficult of these choices includes: (More From Yahoo!7 Finance: Countries With The Highest Taxes)

1. When to Retire

Those who are willing to work a few more years can usually enjoy a considerably better standard of living than those who retire early. But deciding when to retire can also be complicated by the possibility of layoff, early retirement incentive packages, personal health and other factors.

2. Where to Live

Some retirees are content to stay put after they stop working, while others travel the world. There are many factors to consider when choosing where to live during retirement, such as climate, real estate values and proximity to family. (More From Yahoo!7 Finance: Amazing And Absurd Places For Rent)

3. Whether to Keep Working in Some Capacity

Not everyone who quits their job is ready to stop working altogether. Some people need to find another full-time job after retirement in order to support themselves, while others may work part-time to either supplement their income or connect with a hobby or other interest.

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4. Whether to Sell the House

Even retirees who wish to keep living in the same city may want to find an abode that doesn't have three flights of stairs that must be climbed several times a day. Others may tire of keeping up their current residences. But real estate values also enter into the equation; those who cannot sell their homes at a profit may want to think twice about taking a loss at this point in their lives. (More From Yahoo!7 Finance: Highest Paid American And Australian CEOs)

5. How to Manage Your Investment Portfolio

This issue alone can play a substantial role in several of the other decisions listed above. If your portfolio has grown steadily over the years, then your retirement alternatives will be much more pleasant to choose from. But retirees must periodically evaluate their risk tolerance and time horizons, both of which are most likely diminishing at this point in their lives.

6. How to Budget

Retirees who are unable to live within their means often find themselves headed back out into the work force. In order to avoid this, a careful assessment must be made of future income versus current expenses. A budget program or website can be a useful tool for those who have not used a budget previously. (More From Yahoo!7 Finance: Six Investing Rules From The World’s Top Investors)

The Bottom Line

These are just some of the choices that must be dealt with at retirement. Other issues, such as transformation of personal identity and use of leisure time will further complicate the picture. Most retirees would be wise to seek both personal and financial counselling in order to successfully navigate the last major transition in their lives. For more information on preparing for retirement, consult your HR representative or financial advisor. (More From Yahoo!7 Finance: Pension Payouts From Around the World)