Retirement Planning Advice: Must-Ask Questions

Key Takeaways

Retirement Planning: Is It Time for Financial Advice?

Demographic researchers have long predicted a “silver wave” when a record number of Americans turn age 65. This year, an estimated 11,200 people a day are set to hit what is traditionally considered “retirement age.”¹ However, the U.S. Bureau of Labor Statistics projects that more people (than a decade ago) between 65 and 75 will still work in 2026.² My question: Is that because they need to or want to?

As a financial consultant, I hope it’s the latter and that people are financially prepared to stop working. What I do believe is that retirement planning can help. I have found that most of my clients started thinking about financial advice when they were nearing retirement—even if they never thought they needed an advisor before.

When you’re ready to talk to an advisor about your retirement, how do you start? Ask questions. Some are essential for making your retirement plan. Here are my top five questions to ask.

Key Retirement Planning Questions to Ask an Advisor

1. Is My Portfolio Invested Appropriately?

This is a good question for any goal and particularly important for retirement. You want a portfolio that’s designed to help you avoid the fallout of extreme market peaks and valleys, which can cut into your nest egg. The strategies for this are diversification—spreading your investments across different kinds of assets—and having the right amount of risk for you.

You may think this is a good question to ask about five years from retirement, but I believe the earlier the better. It’s tough to try to time the market as you get closer to retirement, especially if you’ve had a portfolio heavy with growth investments.

However, if you’re reassessing your portfolio mix along the way and making sure it matches your appetite for risk, it could mean fewer losses. Higher risk doesn’t always equate to higher returns in the long run, and losses are harder to make up than you might imagine.

2. When Should I Create a Retirement Budget?

Create a retirement budget before you retire. Long before, if possible. Estimating your retirement income and expenses is critical for retirement planning. It can help you know if you’ll have enough to cover your essential expenses and other things you may want to do in retirement.

Base your retirement budget on what you’re spending now and consider what expenses may fall off and what new ones may be added. A budget now can also help you find money to take care of some important things before you retire—such as paying off high-interest debt. Our budget worksheet includes many different categories that you may want to include, with spaces for today’s budget and for estimated expenses in retirement.

3. When Should I Think About Social Security?

A concrete plan for how and when you will draw your Social Security is a must for the majority of people. Many times the decision comes down to whether you should take Social Security early or delay your benefit.

If you have a lot of other assets, it might be beneficial to delay drawing benefits because you can receive an 8% increase every year until age 70 by waiting. An advisor can help you look at different scenarios for potentially drawing earlier if your health and the life expectancy average of your family warrants it.

It’s worth it to ask questions about Social Security when you become eligible at age 62. If you are part of a couple, knowing different strategies for when each of you should claim could help maximize your benefits or potentially help you better manage taxes on your Social Security.

4. Do I Need a Financial Plan for Retirement?

Ideally you would have an overall financial plan in place before planning for retirement, but if you don’t, the retirement planning process is a good time to get one. A financial plan can put everything together in one place so you can get a realistic view of your financial situation before you retire.

Included in your financial plan will be your investments, savings, workplace retirement plans or pensions, your retirement income needs, assets and liabilities and your budget inflated for retirement. The inflation factor is critical to consider, but most people only think in today’s dollars and not about higher prices in retirement.

In addition, the financial plan can help you decide how you will spend your retirement years. Not everyone can afford the beach house or lavish vacation plans, and that’s alright. What most people want is security and not to run out of money.

Your financial plan can help you know where you are financially, so you can check the boxes off the retirement checklist that helps you know how ready you will be to retire when you want.

5. How Should My Spouse and I Plan for Retirement?

The most obvious answer I have for this question is that you must plan together—even if one plans to retire earlier than the other. Both partners need a voice in what they want retirement to look like and to know what financial situation they’re in as a couple.

Considerations such as whether you need the income if one retires early, what drawing Social Security looks like so you can get the most out of your benefits, and which accounts you will draw from first when you retire are important topics for both of you to discuss with your advisor—together.

Too many times, one spouse oversees the finances and planning and the other is left not knowing what to do if the spouse who handled the finances passes away first.

When to Start Planning for Retirement and Other Client Questions

Aside from the top five questions I think you should ask an advisor; I’m often asked questions before the retirement planning process even starts. Here are a few of those questions:

When Should I Start Planning for Retirement?

Typically, you’ll hear the right time is at least five to 10 years before retirement, but I think it could benefit you to start earlier.

Why start earlier? It’s a lot easier to find out what your financial situation is at age 55 versus age 75. At 55, you have more time to fill in any holes. I doubt many people want to return to work because they have to.

Do I Need an Advisor for Retirement Planning?

If your investment plan is solid and you’re comfortable with your investments, maybe not. However, I’m a strong advocate for having a financial plan. And to be clear, retirement planning is not the same as retirement saving. Saving for your future is best when you start as early as possible, such as with your first job.

I’ve seen the difference a financial plan can make for retirement readiness. I estimate that about 75% of my clients know they are financially ready because they have the plan. Others may or may not be ready, but are still looking to know what kind of financial shape they are in. And some don’t reach out until they are in retirement.

What Should I Know About Medicare?

One thing I share with my clients is to remember the importance of keeping their income below a certain level, so their Medicare premium doesn’t go up. Lower Medicare premiums can be a big deal for helping make your money last. It could also make a difference in where you withdraw money from first.

If your income will be higher, it may make sense to pull retirement funds from a Roth IRA early on, so it doesn’t count as income and increase your Medicare premium.

Is It Too Late to Plan If I’m Already Retired?

Not at all. The conversation will look different than if you hadn’t retired yet, but the goal is always to help you have confidence about your money in retirement. It’s never too late to find out where you stand financially and how you should invest.