Ask Yourself These Key Retirement Questions About Long-Term Finances

March 17, 2023

As you plan for retirement, there are several key questions you need to answer to be sure you have covered every area and won't be met with an unanticipated financial expense after you stop working.

First, what will you do if the stock market crashes? It is good to have other options available besides selling off your stocks at the bottom of the market.

Second, how will you pay for inevitable medical bills? Thoughtfully consider your Medicare options and choose the one that makes the most sense for you.

Third, who will be your financial advocate if you are unable to handle your finances in the future? Perhaps an adult child or other relative can offer assistance in your later years – keep your finances organized in the event they may need to step in someday.

Fourth, what will happen if your spouse passes away? Make sure you will be financially secure if one spouse's retirement income ends due to death.

And finally, is there any work you could do on the side to bring in income in your retirement years, should you need it? Be creative and consider avenues that are enjoyable to you. Steve Vernon "5 Questions To Ask Yourself About Your Retirement Finances" forbes.gov (Jan. 26, 2022).

Commentary and Checklist

The sooner you start saving for retirement, the better off you will be. Even if you get a late start at saving, you can still maximize your nest egg by saving aggressively and meeting with a financial counselor who can advise you on what investments are right for you. The most important part of saving for retirement is just to get started! Even investing a small amount today can yield greater dividends in the future.

Be sure you are contributing to your 401(k) accounts as much as you can—because this money comes out of your paycheck before federal income taxes are assessed, you can invest more of your income without feeling it as drastically in your monthly budget. Do your best to meet your employer’s offers to match your 401(k) contributions, and in addition, consider establishing an individual retirement account (IRA) – either a traditional IRA or a Roth IRA - to help boost your nest egg more quickly.

Here are reasons people postpone retirement:

  • There are many reasons people continue to work past traditional retirement ages. The decision of when to retire is not a purely financial one because people have differing opinions about the role work plays in their lives.
    • Some reasons people postpone retirement are:
      • The high cost of health insurance and decline in employer retiree health benefits and pensions
      • Life expectancy increases means more years spent in retirement
      • A desire to accumulate more Social Security or other retirement savings wealth
      • Improved emotional well-being and physical health by remaining active
      • Work promotes social integration and social support.
    • About half (49 percent) of retirees say they left the workforce earlier than planned, often to cope with a health problem or disability (61 percent) or to care for a spouse or other family member (18 percent).
    • Other retirees are forced out of their jobs because of changes at their organizations, such as a downsizing or closure (18 percent), changes in the skills required for their jobs (7 percent) or other work-related reasons (22 percent).
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