7 Questions You Must Answer Before Retirement

7 Questions You Must Answer Before Retirement

Almost 10,000 Americans turn 65 years of age each day. Most are poorly prepared for what lies ahead. We have isolated seven questions that everyone must answer BEFORE they retire. These questions are:

  1. When Will You Retire?
  2. Where Will You Retire?
  3. When Will You Take Social Security?
  4. What Will Your Health Insurance Coverage Be?
  5. How Much Risk Do You Need?
  6. What Will You Do?
  7. How Will You Handle “The Unknowables”?


When you retire holds the place of priority among the list for obvious reasons. Once you stop working, you start withdrawing and depleting your accumulated pool of financial resources. One fun fact: the average retirement age in the U.S. has changed very little over the past half century. Age 63 has remained the average retirement age largely because the early date for Social Security kicks in at age 62. What has changed is life expectancy. We have written extensively on this topic recently. For many individuals, planning to live past age 90 is realistic.


It is not uncommon for retired couples to relocate after a few years in retirement in order to be closer to family. Living costs in South Carolina are quite different than they might be in other parts of the country. Perhaps you plan to downsize but stay in the area. If so, don’t expect to reap a real estate windfall in that process. Our experience tells us that this generally amounts to an exchange of value from an older, larger property into a smaller, equally as expensive home.

Social Security

As we mentioned earlier, many individuals start collecting Social Security at or around age 62. For most, this will end up being a financial mistake. Delaying your start date for Social Security increases your monthly benefit by over 8% each year that you wait from age 62 to 70! There are of course many factors that weigh on the decision, but if you can delay, in most cases you should.

Health Insurance

Healthcare expenses of all kinds can be a heavy burden in retirement. Yes, many of these expenses will be covered by Medicare or Supplemental Insurance, including continuing coverage from your employer. All said, however, a significant portion of healthcare costs will not be covered by any type of insurance. Research points to more than $200,000 in uncovered medical expenses between age 65 and death for the average retired couple.

How Much Risk?

Investing means taking a risk; Not investing also means taking a risk. Cost of living increases, (inflation), are the silent enemy in retirement. An individual turning age 65 this year has experienced an average inflation rate of 3.5% per year during their life. Almost everything that you buy costs more each and every year. If your resources don’t keep pace, your lifestyle has to decline.

What Will You Do?

Retirement can be a time for reinvention and regeneration. Many of our retired clients find great meaning by doing volunteer work, mission work or just engaging more directly with their children and grandchildren. Some even opt to continue working part time. Whatever the case, having sufficient activities to fill your time is crucial to a satisfying retirement.

The Unknowns

Retirement is full of surprises, and many of these can’t be anticipated or known in advance. There will be financial surprises, of course, but also psychological and physical surprises. These surprises, or unknowns, will likely take both positive and negative forms.

Planning for retirement is indeed multi-faceted and complicated but can reap handsome and long-lasting returns. The best time to start is five or more years prior to retirement. The second best time is...today. 

James E. Wilson

James founded South Carolina’s first fee-only financial planning firm in 1982 and is a pioneer in the financial planning field. He has advised hundreds of successful individ ... Click for full bio

Most Read IRIS Articles of the Week: March 19-23

Most Read IRIS Articles of the Week: March 19-23

Here’s a look at the Top 11 Most Viewed Articles of the Week on IRIS.xyz, March 19-23, 2018

Click the headline to read the full article.  Enjoy!

1. Multi-Factor or Not Multi-Factor? That Is the Question

Let’s pretend you are a US investor that wants to deploy some of your money overseas.  You think international developed market stocks are attractive relative to US stocks, and you also think the US dollar will decline over the period you intend to hold your investment.  — Chris Shuba

2. The Lies Spread by Bankers About Cryptocurrencies

I had a chat with The Financial Times the other day, and provided lots of background as to why I don’t think cryptocurrencies are the choice of criminals. The comment that was reported was the following ... — Chris Skinner

3. Alternative Investments? You May Need New Shock Absorbers!

During the tumultuous red and green gyrations of the capital markets this year have your clients anxiously called to ask: “What’s going on with my portfolio?” What do you do when the usually smooth ride in your luxury automobile becomes as bumpy as Mr. Toad’s Wild Ride in the Happiest Place on Earth? What does the average investor do? — Ted Parker

4. Why Fear of Inflation Is Rattling Investors

Inflation is a bad thing, right? It make things more expensive, right? For those of us of, let’s say, a certain vintage, we recall the runaway inflation of the late 1970’s and early 1980’s. So why does the Federal Reserve – in charge of managing the country’s currency and value thereof – actually try to create inflation? It’s called the inflation targeting and it matters to your money. — Bill Acheson

5. The Best Retirement Investments for a Steady Stream of Income

As you near your 60’s, your prime earning and saving years will transition into a period of time where you get to enjoy the “fruits of your labor,” a.k.a retirement. We call this segueing from accumulation to decumulation, the period when you will be drawing from your accumulated nest egg. Dana Anspach

6. An Emerging Theme In Thematic Investing

Exchange traded funds (ETFs) are popular vehicles for market participants looking to engage in thematic investing. Thematic investing looks to take advantage of future growth trends, including disruptive technologies. Given that forward-looking approach, stock-picking in the thematic universe is equally as hard, if not harder, than in traditional market segments. — Tom Lydon

7. 8 Winning Questions You Should Be Asking Every Prospect

It’s not enough for your salespeople to be product experts, they also need to be capable of having the kind of conversations that position them as business experts and even strategic resources. — Lisa Rose

8. 10 Steps to Successful Strategic Alliances

Business growth doesn’t come from wishful thinking. As you know, it takes a lot of hard work. The growth of your business is not an option – it is a necessity. Coordinating the right mix of strategies to gain market share and improve client acquisition rates is essential to advance your firm in today’s economy. — Michelle Mosher​​​​​​​

9. Keep It Light: Harnessing Humor for Financial Marketing Success

It’s undoubtedly true that investors’ financial security is no laughing matter, and this is reflected in the stolid, dour, reliable imagery and branding that is, by and large, the industry standard. This is hardly surprising—investors need to believe they’re placing their hard-earned money in the hands of experienced, trustworthy professionals. — Alexandra Levis​​​​​​​

10. Do the Economics of a Move to Independence Really Add Up?

The number one question advisors ask when exploring a move to independence is how the economics compare to accepting a recruiting package from a major firm. It’s certainly a valid concern, because while the recruiting deals being offered by the wirehouses are down, it is still very possible for a top advisor to get a really attractive hard-to-pass-up offer. — Mindy Diamond

11. Four Big Reasons Why Short-Term Muni Bonds Should Excite You

Municipal bonds might not be the first thing that comes to mind when you think of a sexy investment. They don’t typically command news headlines like the stock market or bitcoin. — Frank Holmes

Douglas Heikkinen
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IRIS Co-Founder and Producer of Perspective—a personal look at the industry, and notables who share what they’ve learned, regretted, won, lost and what continues ... Click for full bio