Key Takeaways:
- To determine if they’re financially and mentally prepared for retirement, pre-retirees can discuss key questions with a financial advisor, including how they will spend their days in retirement, how to manage rising healthcare costs, and how to navigate unexpected expenses.
- Healthcare costs, long-term care, and significant debt can erode a retiree’s spending power, requiring a proactive, stress-tested plan to avoid problems.
- Retirement planning doesn’t have to be done alone or all at once. Pre-retirees should consult a financial advisor to help them navigate options so they enter their next chapter with clarity and peace of mind.
Retirement will change more than your income; it will shape how you spend your time and find purpose when your identity is no longer tied to your career. In addition to saving enough to retire on your terms, you must prepare psychologically for the new life those dollars will support.
Fortunately, planning for retirement doesn’t have to be done alone. As experienced financial advisors who specialize in retirement planning, we’re dedicated to guiding you through every phase of your next chapter with clarity and peace of mind.
If you’re just starting the retirement planning conversation, we encourage you to use this guide for key questions you can discuss with a financial partner to determine if you’re financially and emotionally ready for retirement.
Question 1: How Do You Envision Your Daily Life in Retirement?
In retirement, you essentially shift from a structured routine to an open-ended schedule. Envisioning how you may spend your time and resources in retirement will also help dictate your income needs and a target savings goal. Here are a few questions you can ask:
- Will you travel more to visit family, or join a community or club to socialize?
- How do you plan to spend your time, by volunteering, consulting, or pursuing new hobbies?
- Will you continue to work at all during retirement?
- Are you planning to retire in place, move closer to friends and family, or downsize to save money?
- How will you find purpose and identity that’s not career-based?
With a preliminary vision in place, you and your financial advisor can begin estimating monthly expenses to develop a cash-flow model that supports your new lifestyle and informs decisions about your current savings, investing, and spending.
Question 2: How Many Distinct Streams of Income Will You Have?
In retirement, you’ll also shift from a paycheck to retirement income sources like pensions and Social Security, as well as drawing from savings and investments, such as retirement accounts, and brokerage accounts. Retirees must understand how they all work together and evaluate timing considerations, varying tax treatments, and flexibility.
We regularly help pre-retirees review their accounts and develop a tax-efficient withdrawal strategy based on their anticipated income, tax planning opportunities, and key milestones, such as claiming Social Security.
More than the amount you withdraw, retirees should also consider the order in which they access taxable, tax-deferred, and tax-free assets. Strategic sequencing is one way to help retirees preserve more wealth and manage tax brackets for Social Security, Medicare premiums, required minimum distributions (RMDs), and other income-based factors.
A cohesive plan can help retirees avoid tax surprises, create a consistent, reliable income, and support long-term stability.
Question 3: Is Your Balance Sheet Clear of High-Interest or Significant Debt?
In retirement, your income may be fixed. If you’re carrying high-interest or significant debt into retirement, it could reduce the income meant to support your new chapter. Credit card and personal loan debt can compound quickly, and all debt requires consistent cash flow to manage. These obligations could limit your options in the long term, especially if you face market volatility or an unexpected medical event.
Our goal is to help your retirement income support your lifestyle, not debt interest. Your financial advisor can help you review your liabilities to understand their true impact on your cash flow, now and at key times in retirement. This information can help inform a plan that prioritizes paying down high-interest debt or integrating your obligations into your broader strategy.
Question 4: Do You Have a Dedicated Strategy for Rising Healthcare Costs?
Healthcare is among the top three largest expenses in retirement but it can also be highly predictable. Rising medical expenses, which often outpace general inflation,1 can significantly impact a retiree’s debt, income, and flexibility. While you may be eligible for Medicare, it’s important to familiarize yourself with the different parts of the program to understand what’s covered and what’s out-of-pocket. For example, Medicare doesn’t cover long-term care, and Original Medicare doesn’t cover hearing, vision, and most dental procedures, among other expenses.2
To avoid facing an unexpected financial burden, it’s essential to create a realistic projection of healthcare costs at various points in time, considering Medicare premiums, out-of-pocket expenses, and long-term needs. You can then evaluate strategies, such as insurance options, using a health savings account (HSA), or reducing discretionary spending, that address flexibility, longevity, and unanticipated costs.
Question 5: Is Your Safety Net Fully Funded for the Unexpected?
In addition to unexpected medical expenses, retirees may also face unplanned costs associated with home repairs, supporting other family members, and other hidden costs of retirement that may require access to quick funds. Maintaining a dedicated cash reserve in an easily accessible, liquid account, such as a savings or money market account, can help prevent cash flow disruptions.
A financial advisor can help you calculate a suitable cash reserve amount for your lifestyle and needs. At a minimum, an emergency fund should typically cover three to six months of essential, non-discretionary expenses, such as housing, groceries, and utilities. A dedicated reserve can often help retirees avoid selling investments at inopportune times or tapping into long-term assets.
Question 6: Have You Addressed the Great Unknown of Long-Term Care?
Long-term care needs, including assisted living or a private nursing home, can range beyond $125,000 annually.3 Without a long-term care plan, your portfolio assets — and your mental health — can quickly become strained in covering expenses.
Factoring in potential long-term care costs, considering your age, gender, family history, and other data, should be part of your broader retirement plan. A financial advisor can help you forecast hypothetical scenarios to stress-test your plan and demonstrate their impacts. In collaboration with an insurance professional, you can explore funding options, including long-term care insurance, self-funding from your portfolio, or a combination of solutions. They can also coordinate your strategy with your estate plan to best protect your spouse, heirs, charitable goals, and other assets in the event of an unexpected situation.
Question 7: Are Your Final Instructions Current and Comprehensive?
While you may have already considered a will, it is only one component needed if you’re unable to make medical or financial decisions. In legacy and estate planning, a power of attorney, medical directives, and beneficiaries are just as critical.
To avoid delays or confusion in the event of your incapacity or passing, ensure these key documents are current and updated, especially if you’ve had a major life event, like a divorce, marriage, or birth; have added accounts or assets; or changed your preferences. Collaboration between your financial advisor and estate attorney is critical to keep your legal and financial documents in sync to protect your family’s financial interests. They can help ensure beneficiary designations are up to date and accounts and assets are titled correctly, and facilitate family conversations and next steps when needed.
Question 8: How Will You Manage the Psychological Shift of Spending vs. Saving?
Many retirees struggle with the mental shift from saving for retirement to spending in retirement, also known as the decumulation phase, when they begin drawing from their retirement savings to generate income. Viewing retirement spending as a natural part of your career and considering the non-financial value, return on investment, and memories spending can bring to your retirement, among other strategies, are shifts that can help reframe your mindset.
Additionally, developing an efficient withdrawal strategy — whether the 4% rule, bucket strategy, or another method — that considers your needs and anticipates and adjusts to shifts can make the transition from saver to spender easier, helping you spend with confidence.
Question 9: Does Your Current Investment Risk Align with Your Needed Return?
In retirement, a portfolio’s focus often shifts from strictly growth to income and preservation. For example, an aggressive approach may lead to large market swings and emotional reactions, while being too conservative may limit your ability to keep pace with inflation. The key is finding the right balance. An advisor can help you align and stress-test your allocations based on your age, timeline, risk tolerance, and various economic conditions, so you feel confidently supported without taking on undue risk.
Question 10: What is Your Plan for Giving Back or Leaving a Legacy?
Retirement is an opportunity to support the people and causes you care about most. Many new retirees find themselves in the “sandwich generation,” in which they’re financially supporting young or adult children, aging parents, and themselves. Without a clear plan, the period can be financially draining to a retiree.
Charitable giving is also a powerful tool wealthy families can use to fulfill their philanthropic wishes while potentially reducing taxes. Some common methods include:
- Donor-Advised Funds (DAFs): Acting like your own personal foundation, you can make larger lump sum cash donations to the DAF, recommend grants to your preferred charities over time, and get an immediate tax deduction.
- Charitable Remainder Trusts (CRTs): CRTs offer an upfront charitable tax deduction, income payments over a set number of years, and a charitable gift at the end.
A financial advisor can help you to reduce uncertainty and curb indiscriminate spending by creating a retirement budget that factors in family support and charitable giving:
- Setting a defined annual amount for giving, either as part of discretionary spending or a percentage of income
- Using tax-aware strategies, such as a DAF or 529 college savings plan.
- Clearly earmarking assets for heirs, charitable giving, and education funding, which are separate from assets that fund your lifestyle
From Questions to Solutions: Designing Your Future Together
The various aspects of your post-career life underscore that retirement planning is not a one-time event but an ongoing process that adapts as your life evolves. Working with a financial advisor for retirement can help bring these topics into focus. If you’re still wondering, “Am I ready to retire?,” we can help. Our team is here to walk you through this conversation so you feel better prepared and more secure in retirement. If you’re uncertain about your retirement readiness, from a financial or emotional perspective, we invite you to schedule a discovery call with our team to get clarity with confidence.
Sources:
1 Rakshit, S. Wager, E. Hughes-Cromwick, P., Cox, C. Amin, K. (2024, August 2). How does medical inflation compare to inflation in the rest of the economy? Peterson-KFF Health System Tracker.https://www.healthsystemtracker.org/brief/how-does-medical-inflation-compare-to-inflation-in-the-rest-of-the-economy/.
2 Medicare.gov. What’s not covered? https://www.medicare.gov/providers-services/original-medicare/not-covered.
3 Horovitz, B. (2025, November 6). 10 Unexpected Expenses in retirement. AARP. https://www.aarp.org/money/personal-finance/most-common-underestimated-expenses/#:~:text=The%20average%2065%2Dyear%2Dold%20retiring%20in%202025%20will,according%20to%20an%20annual%20Fidelity%20Investments%20study.