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Top 8 Questions to Ask Your Retirement Planner

Financial Independence does not happen overnight. Your financial planner should have the expertise to plot an effective strategy for each stage of life. That includes saving and growing investments throughout your careerplanning when, where, and how you’ll retire; and maintaining financial security and lifestyle goals throughout retirement. Retirement planning is a long-term process. 

Ask the following questions to make sure your planner can develop a strategy that suits your needs:   

1. How do I know what to do in order to be ready for retirement?

This question should not be answered with a number produced on the spot, but rather should begin a detailed discussion about the retirement lifestyle you desire. That might include where and in what type of residence you hope to live, your preferred leisure activities and hobbies, and whether you plan to work part time. Your advisor should be able to show you how she came up with an answer for your retirement readiness. 

2. How do I know if I’m saving enough? 

Despite the availability of Social Security payments and a possible (though increasingly rare) pension, self-funding your retirement is the ultimate goal. Your resources may include a 401(k) with company matching, an individual retirement account, and a variety of other possible investments. The definition of “saving enough” will shift due to factors such as economic and market conditions, your career trajectory, and how long you have to save until retirement. Your financial planner should be skilled at addressing your individual situation. 

3. How do you manage retirement portfolios differently than other portfolios? 

If you’re at the beginning or middle of your career, you’ll generally want to focus on saving money and growing assets. As you approach retirement, you need to start planning for ongoing cash needs. Once you’re retired, you’ll need to start living off your investments. Your financial planner should be able to create a game plan for all stages for a retirement income strategy that lasts your lifetime. 

4. What are my biggest financial risks in retirement?

Risk and finance go hand in hand. In retirement, there are outside factors entirely out of your control like stock market declines, inflation, and interest rate increases. Other risks that can change a financial situation include personal ones such as change in marital status, loss of a spouse, or a change in housing needs. The strongest financial planners address these risks and create a detailed plan to you help navigate them.   

5. This <insert fearis my scariest retirement anxiety…how can we address it?

Just like #6 above, this question probes the same challenge from a different angle. You face financial risks in retirement just as in any other stage of life. These fears may include running out of money, an expensive health challenge, a serious financial setback, or a threat to remaining in your home. Your advisor should discuss your personal fears and adapt your plan to mitigate risk and/or address challenges should they arise.  

6. What’s my best strategy for generating income in retirement?

Timing and other strategic choices can have a major effect on the financial benefits people derive from Social Security, pension payouts, and withdrawals from investment accounts. Your financial planner should be able to guide you through the complexities of how withdrawals and payouts will affect taxes, cash flow, estate maximization, and other issues. 

7. How will I know when to retire?

Two important aspects come to mind in working out the answer to this question. The first is financial. Do you have enough money for your preferred retirement lifestyle? Your advisor can help you calculate how long it will take to hit your savings goal, how to adjust savings and investments to speed up that process, and how economic conditions might affect your timing. Our recently retired partner, Marjorie Fox, discussed the second and more personal aspect in an FJY blog postthe mental and physicacomponents to consider when deciding whether or not to continue working. The decision is yours, but your advisor can support you by modeling the financial implications of various scenarios.  

 8. What are my next steps?

No matter your age, your advisor can start you now on a concrete plan to reach your retirement goals. That includes savings and investment actions, benchmarks to measure progress, a regular meeting schedule to review results and life changes, and an open-door policy for you to contact your advisor with questions and concerns. 

FJY financial planners can put you on track to make your retirement dreams a practical reality. Reach out and let’s get started!