Five Questions to Ask Before You Retire

Something interesting happens when I sit down with successful professionals approaching retirement. Despite years of careful planning and saving, there’s often an underlying question: “I’ve built my nest egg, but how do I know if I’m truly ready to make the transition?“

After years of helping professionals navigate this pivotal moment, I’ve found that retirement readiness isn’t just about hitting a specific number in your account. It’s about having clarity on five crucial questions that can make the difference between retiring and retiring with confidence.

Do You Know Your Monthly Number?

Years ago, I used to watch a show called “The Profit,” where Marcus Lemonis would help struggling businesses get back on track. One thing that consistently surprised him was how many business owners didn’t know their numbers. I’ve found the same challenge exists with retirement planning.

Your monthly number isn’t just about maintaining your current lifestyle. The retirement equation looks different: commuting costs decrease, while spending on hobbies, travel, and healthcare typically increases. Many of my clients are surprised when we subtract their current retirement savings contributions from their budget – after all, you’ll be switching from saving mode to spending mode.

This monthly number becomes the cornerstone of your retirement plan. It’s the figure that tells you whether your savings, Social Security, and other income sources will truly support the lifestyle you’ve envisioned for your next chapter.

Have You Accounted for Healthcare Costs?

Healthcare expenses are often the biggest surprise in retirement planning conversations, even for well-prepared professionals. While Medicare provides important coverage at 65, it’s not the comprehensive solution many expect. The gaps can be significant, especially if you’re planning to retire earlier.

Think beyond just monthly premiums. Consider deductibles, out-of-pocket costs, and long-term care needs. One strategy I frequently discuss with clients is leveraging a Health Savings Account (HSA) – arguably one of the most tax-advantaged tools available for managing future healthcare costs. When used strategically, an HSA can become a powerful component of your retirement healthcare funding strategy.

Is Your Investment Strategy Ready for Retirement?

Here’s a truth that often surprises my clients: the investment strategy that built your wealth isn’t necessarily the one that will sustain it through retirement. This shift requires more than just minor portfolio adjustments – it needs a fundamental change in approach.

Your retirement investment strategy needs to balance competing priorities: maintaining growth while generating income, preserving capital while ensuring longevity. This means carefully considering:

Which accounts to tap first for income
How to structure your portfolio for both growth and stability
When and how to handle Required Minimum Distributions (RMDs)
How to maintain your lifestyle while protecting against market volatility

The key is creating a strategy that not only protects what you’ve built but ensures it lasts throughout your retirement years.

Have You Planned for Taxes in Retirement?

One of the largest bills you’ll face in life is taxes, and retirement doesn’t change that fact. What does change, however, is how those taxes are calculated and managed. Many of my clients are surprised to learn how different their tax situation becomes in retirement.

Consider how various income sources interact: Social Security benefits (yes, they can be taxable), retirement account withdrawals, investment income, and even part-time work all create a complex tax picture. This is where strategies like Roth conversions can play a crucial role – not just in managing current taxes, but in potentially reducing your lifetime tax burden.

What Does a Meaningful Retirement Look Like?

While the financial aspects of retirement are crucial, equally important is the question of meaning. Through years of helping clients transition into retirement, I’ve developed a framework I call the “Three Cs” of a fulfilling retirement:

Creativity: Engaging in activities that challenge your mind and fuel personal growth, whether that’s learning new skills, joining a book club, or pursuing long-held interests
Connection: Maintaining and building meaningful relationships with family, friends, and your community
Contribution: Finding ways to make an impact in areas you care about, whether through volunteering, mentoring, or supporting causes close to your heart

Try this exercise I often share with clients: Imagine the first Monday of your retirement. Sit with your morning coffee and visualize not just your day, but your week and your month. What activities fill your calendar? Who is the first person you’re going to have lunch with? What gives you purpose? What makes you excited to start each day?

Creating Your Framework

The transition to retirement represents one of life’s most significant changes, both financially and personally. Each of these questions builds upon the others, creating a comprehensive framework for your retirement journey. The key is aligning your financial resources with what truly matters to you.

Remember, while these questions have helped many of my clients retire with confidence, your specific situation – including your career history, family dynamics, and personal goals – should guide your approach. The best retirement plans are as unique as the individuals they serve.

Want to learn more about building a retirement strategy that works for your situation? Let’s talk about how these approaches might fit into your retirement journey.