These assets might include your home, perhaps a business or rental property, or personal assets such as a vacation property, boat, or car.

Liquidating assets

Once you have determined that you will need to liquidate some of your assets to fund your retirement, it's best to take a strategic approach to drawing upon your assets. You can develop a plan of action based on the answers to these questions:

• How much extra income will you need?
• What will you be selling, and when?
• Would it be better to liquidate all at once or over several years?
• How will you invest the proceeds?
• What will be the impact on your family and potential heirs?

A realistic plan, created with professional advice, will ensure that you avoid a "fire-sale" situation, in which you are forced to sell assets below market prices.

Don't forget taxes

Keep tax implications in mind, too. Any capital gain on your principal residence is likely to be tax-free, courtesy of the principal residence deduction. Qualifying shares of small business corporations may be eligible for a $800,000 capital gains exemption. The sale of other assets, however, such as a cottage or rental property, may result in a taxable capital gain.

Keeping the family business

If you're planning to transfer or sell your business to family members, you will want to make sure you get the best value for your business and can fulfill your estate planning wishes.

No matter what your situation, professional advice can help you prepare a plan for the orderly liquidation of appropriate assets.