Five Questions to Ask Yourself before Retiring

I’ve been chatting with a fair number of 60-somethings in the last month or so. All were looking forward to retirement. Often they expressed decades of burn out from long hours in someone else’s business. But they all expressed the same worry: How do you actually go about retiring?

Here are my Five Questions to Ask Yourself before Retiring. They’re meant as a quick checklist. You’ll see where you’re ready and where you may have more work to do. In retirement you only want happy surprises.

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1. What do I need? What do I want?

Let me give you an example of what I mean. I don’t have children, so I don’t necessarily have a default caregiver as I age. My dad lived to 90. My mom is 90 now. Both grandmothers lived well into their nineties. I need to plan for longevity. Thankfully I and my ancestors tend to healthy, but what if your family has diabetes, heart disease, or dementia? Different concerns and solutions.

When I retire, I see myself traveling as much as possible, taking art classes at last, and generally being very active. What about you? What steps are needed to see that dream through?

2. What does Social Security say?

Unfortunately Social Security benefits aren’t as large as people expect, so know your number. Social Security also determines whether you’re eligible for Medicare. You need ten years of work history paying into Social Security to qualify. Alternatively you may qualify based on your spouse’s benefit. Or you can pay a monthly premium to join. Check your status to make sure you don’t get surprises.

3. Where’s my money?

Do you have a good handle on your savings and your investments? How about any debt from credit cards, cars or your home mortgage. How those two numbers relate to each other drives the lifestyle you can expect. A certified financial planner is an excellent long term partner to make sure you’re getting the best growth and security.

Are you sure you have everything? If you’ve changed jobs, you may have left additional funds with your former employer in things like 401K plans, Individual Retirement Accounts, and Healthcare Savings Accounts (HSA). The money is still yours, so roll it into your main account. You should have received annual communications on these assets, but they can get lost if you’ve moved. Check your records!

4. What’s my plan for Long Term Care?

No one wants to consider an illness or injury that leaves you incapacitated, but it can happen. Do you have legal documents in order? You need not only a Will, but a Durable Power of Attorney and Healthcare Directives. Who will make decisions for you if you can’t make them yourself?

How do you plan to pay for physical care if you can’t live independently? Medicare doesn’t cover long term, custodial care. Nursing homes can cost thousands of dollars each month. There are options out there: Long term care insurance, most cost effective the younger you are when you buy it. Life insurance and annuity products have features designed to finance care. Medicaid is available as payer of last resort, but that means you no longer have assets to your name.

Make a plan that works for you and the ones you love.

5. How am I going to manage my health?

Unfortunately Medicare isn’t always just Medicare. There are Original Medicare, Medicare Advantage, and Medicare Supplement plans. Each one balances flexibility against coverage and cost in a different way. Do you know which one is most likely to safeguard your health?

Don’t forget: Do you need care outside of Medicare, like dental, vision and hearing coverage?

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If any of these questions are making you queasy, don’t panic. Let's have a conversation. Put your questions in the comments. I can give you the background and information you need to feel safe and comfortable with your choices. Retirement planning is a lot, but it’s manageable. Be patient with yourself.