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Retirement Planning Questions You Should Be Asking (FAQs)


Making a good plan, any plan, generally starts the same way: You need to ask the right questions. Whether getting a degree, finding a job, buying a house, or anything else, the right place to start is by asking the right questions. It will help you clarify what you want to achieve and the details of how you want to start getting there. The same is true for retirement. When planning for retirement, the best way to start is by asking yourself a few important questions. While far from a complete list, here are 10 questions to help you get started.

If you need help saving for retirement, a financial advisor can guide you in creating a personalized plan.

What Is My Retirement Goal?

Having a clear idea of your retirement is important. Do you know what type of lifestyle you want to maintain? Where you want to retire? What hobbies or activities your want to have? Defining your retirement goals will help you create an effective retirement plan.

This isn’t a line-item spreadsheet, rather a big-picture plan. Do you want to travel? To fish? To live in a big city or a small town? Do you want to keep your current lifestyle? Expand? Cut back? Knowing your retirement goals in general will give a sense of scope and location for your retirement, which in turn will inform the more specific parts of your plan.

When Do You Want to Retire?

The answer to this question essentially defines the age that you want to retire at. Like your goals, your retirement age will inform almost everything else. The longer you work, the longer your savings and benefits can grow. And the earlier you retire, the more income you will need to generate from your savings.

Your financial plan will depend heavily on how long your money has to grow, so it’s important to establish that timeline.

What Social Security Will You Collect?

For many Americans, Social Security is the backbone of retirement. It provides a guaranteed, inflation-adjusted income that carries many households through their retirements. 

Whether you depend on Social Security or collect it as a nice benefit, understand what you will collect. You can estimate this with SmartAsset’s Social Security calculator, or you can use the SSA’s website to calculate your accrued benefits. 

Either way, this is where your retirement income will start. It’s a very good idea to know what you can expect.

What Are Your Income Sources?

Identifying retirement income sources like Social Security, investments and part-time employment will help you understand how much money you will have to pay for expenses. And many retirement experts will recommend diversifying those sources to maintain greater financial security.

You may currently have a 401(k) and will collect Social Security. But if you can afford to buy a home at some point, you could use that as an asset to generate cash or income in retirement. If you have extra money to set aside in savings, you could add an IRA or Roth IRA. If you are approaching retirement but still healthy, you may also consider taking on part-time work. All of these are potential sources of income that can fill out your retirement plans.

What’s Your Retirement Budget?

This is the line-item part. When you have a clear sense of your retirement lifestyle and needs, it’s time to estimate a budget.

You don’t need a rock-solid answer to this question. In particular, the further out you are from retirement, the more this will be an estimate of your future needs. But it’s an important estimate. Once you have a budget, you have a goal. And once you have a financial goal, you can make a financial plan.

How Much Do You Need?

A woman reviewing the performance of her retirement investments.

Once you estimate your budget and retirement age, the next step is to figure out what kind of savings will help you generate that kind of income. 

For example, say that you estimate a retirement budget of $100,000 per year to meet your retirement goals and health needs. Based on your estimated Social Security benefits, what kind of savings will you need to generate the remainder of that income? How much money should you save up in your 401(k) and other retirement portfolios to generate the income you need? This is the step where you start turning your ballpark goals into real, solid numbers.

How Long Do You Expect to Live?

This question will require you to consider how long do you expect your retirement to last. In doing so, you will need to assess your current financial situation and estimate how much money you’ll need to support your desired retirement lifestyle.

In other words, do you have enough money saved and invested to cover 20, 30 or more years of retirement? Can your nest egg cover healthcare, housing and leisure activities for that length of time? A retirement calculator can help your estimate whether your current savings and investments are enough to cover an expected timeline. And in the time that you have left until retirement, it can help you set aside enough money each year to meet those target goals.

How Will You Manage Your Taxes?

Far too many pre-retirees forget about their future taxes. Don’t let that happen to you. In retirement, your taxes will shift. You will likely pay taxes on Social Security benefits, you might also owe income taxes on retirement savings withdrawals, and capital gains taxes on investments and other assets. And all of this can take many households by surprise. It’s easy to run the numbers, see that your portfolio and benefits will generate $100,000 per year and tell yourself it’s a job done. So don’t forget, that’s $100,000 before taxes. 

How Will You Balance Discipline and Joy?

Many households make a retirement plan around an aggressively austere lifestyle. But for some reason, the same people that enjoy new experiences, eating out and traveling to see friends also assume they will cut all of that on their 67th or 70th birthdays. Don’t make that mistake. 

The odds are you will enjoy many years of good health after full retirement age, especially for younger generations who have no clear idea what to expect from medicine over the coming decades. Make a plan that balances the financial flexibility to enjoy those years with the financial discipline necessary to live on a fixed income. This isn’t just a lifestyle issue. The tighter your budget, the more likely it is that you will splurge and spend money you don’t have, which can be a difficult spiral to recover from.

How Will You Learn, Adapt and Grow?

Finally, think of financial discipline like a habit. This isn’t about making a plan one time and calling it done. Instead, how will you continue to learn about finances? How will you continue to adapt your plan and grow as a household?

Take a holistic approach. Continue to learn about money management. Speak with good advisors who can help you find smart ways to invest and grow your wealth. At the same time, keep an eye on your finances. How do your needs and lifestyle change over time? How can you adjust your savings and goals? Take note of when you can accelerate your savings, and if you can make even more ambitious plans.

Bottom Line

A senior reviewing her retirement benefits.

Making a good financial plan starts with asking the right questions. What are your goals? What are your needs? Answering these questions will help position you for a comfortable retirement. And remember, planning for retirement is neither a marathon nor a sprint. It’s simply a matter of building good lifetime habits.

Tips on Building a Retirement Budget

  • Many retirees worry about running out of savings. But not spacing out your spending can also hurt your finances in retirement. Here’s how you can create a retirement budget.
  • A financial advisor can help you build a comprehensive retirement plan. SmartAsset’s free tool matches you with up to three vetted financial advisors who serve your area, and you can have a free introductory call with your advisor matches to decide which one you feel is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.

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