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5 Questions To Answer Before You Retire

Retirement is an exciting adventure, but it’s also a big life change and adjustment. You may feel equally joyous and terrified as your golden years approach, and that’s normal! To conquer any negative feelings, you need a full-picture view of how to prepare your finances and investments. If you’re getting ready to retire, here are 5 questions you should ask yourself before you take the plunge.

1. Is your healthcare accounted for?

Healthcare is one of the most critical areas for retirees. Fidelity now estimates that couples spend $295,000 medical expenses alone in retirement, not including long-term care. To put it simply, healthcare is expensive!

Many retirees qualify for Medicare once they reach 65. The are four parts of Medicare:

  • Medicare Part A: This starts automatically when a person reaches age 65, and covers hospitalization, primarily

  • Medicare Part B: starts after age 65, when a person signs up for that benefit. This election should be done within three months before or after the 65th birthday month to avoid penalties. Part B covers primarily outpatient care/physician visits.

  • Medicare Part C: Offers an alternate way to receive your Medicare benefits.

  • Medicare Part D: This provides prescription drug coverage.

Exceptions to this “age 65” rule include those with disabilities, who can qualify for medicare benefits at the time of their disability if applied for and accepted.

A person can elect to “replace” their Medicare benefits with a Medicare Advantage plan (offered by most major medical insurance carriers), or keep their Medicare and apply for a supplemental plan (which pays for deductibles, etc), a dental/vision plan, and a prescription drug plan. You can visit for more information.

Don’t forget about long-term care insurance. You may indeed end up paying high premiums for years without needing the coverage, but if you do need long-term care, you’ll be grateful you have the coverage.

2. What will your lifestyle look like?

When you retire, you have 40+ hours of your week that you need to plan. How do you want to spend that extra time?

You’ve spent a lot of time preparing for retirement, so now is the time to accomplish everything you’ve been saving for. Do you want to plan a European excursion? Move closer to family? Perhaps start a new business? Here are a few more ideas to inspire you:

  • Spend time volunteering within the community

  • Learn a new language

  • Take up a new hobby like painting or hiking

  • Join a book or wine-tasting club

  • Sit on the board of a non-profit organization

Whatever you choose, make sure you have a plan for your newfound free time.

It’s essential to challenge yourself both physically and mentally in retirement. Almost one-third of retirees in the United States develop symptoms of depression at this stage of life because it can be a confusing time. Most of your life, the days and hours have been planned for you based on school or work. Socialization and fulfillment have been directly related career accomplishments and workplace relationships. But now, in retirement, the world is your oyster! So take some time to decide what you want your golden years to look like.

3. Do you have a retirement income plan?

Now that you have a better understanding of your goals and dreams in retirement, you have to have a plan to fund that lifestyle.

For many retirees, expenses trend downward in retirement—no debt, mortgage, or transportation costs from commuting to work. But that’s not the case for everyone. If you want to travel across the country or buy a new house closer to your family, you may need to make adjustments for those expenses.

Conventional thinking says you should save 10-12 times your annual income. We challenge you to think about it from a different perspective. Create investments that give you access to your annual needs in terms of income. That way you are not depleting a nest egg, but you are living off of what your plans are generating each year.

4. Have you made a plan for your taxes?

Taxes—everyone’s favorite topic of conversation. But it’s important because taxes can be a hefty expense in retirement.

You are required to pay income tax on your pension and withdrawals from tax-deferred investments like traditional IRAs and 401ks. You may also need to pay tax on part of your Social Security, depending on your overall retirement income.

No need to fear, there are many tax-efficent strategies you can implement to reduce your potential tax bill including:

  • Roth conversions

  • Social security withdrawals

  • Charitable giving strategiy

  • Diversified investment portfolio

The way you withdraw funds can have a significant impact on your taxes. Working with a trusted tax professional will help you avoid any potential penalties and maximize your dollar.

5. Have you updated your estate plan?

You should regularly review your estate plan, but it’s imperative to do so before you retire to ensure that your assets are accounted for. Even if you don’t think your estate is ‘big enough’ to worry about, you still need to devote some time to it.

If you have large assets like a home, boat, or land, you need a plan on whom to pass those assets along.

Your estate plan may need to include:

  • Revocable or irrevocable trust: With a revocable living trust you can choose parts of your estate to go toward certain things while you’re alive. The trustee you chose will take over if you become sick or incapacitated. An irrevocable trust cannot be changed.

  • Power of attorney: A financial power of attorney is someone you legally appoint to manage your financial affairs if you're unable do so. A limited power of attorney sets boundaries on what your named representative is allowed to do.

  • Medical care directive: Referred to as a living will, this clarifies what you want your medical care to look like if you are unable to make those decisions yourself.

Lastly, you need to review and update your beneficiaries, especially if you have acquired new assets. You want to be sure that you control your assets and who they go to when you die.

Build better wealth for retirement

Planning for retirement can be overwhelming and you may need to save a bit more than you originally planned. If you’re interested in learning more about our alternative investment model, get in touch with our team.


This material is intended for informational purposes only and should not be construed as legal or tax advice. Information here is not intended to replace the advice of your investment advisor or financial advisor. This information is not an offer or a solicitation to buy or sell securities. This information may have been compiled from third-party sources and is believed to be reliable. All investing involves risk, including the loss of principal.

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