Think You’re Ready to Retire? Answer These 3 Questions First
You’ve worked hard to get to where you are today. When it comes to retirement, confidence doesn’t come from how much you’ve saved. Rather, it comes from knowing your plan is built to last.
“Retirement security isn’t just about reaching a number. It’s about understanding how your income, investments, and future needs all work together,” says Michael Norton, Senior Vice President, Investments at David Lerner Associates, Inc.
If you’re unsure about the strength of your retirement plan, you’re not alone. Here are three essential questions to help you evaluate where you stand this retirement security month and what steps you may want to take next.
Do You Know What Your Monthly Expenses Will Be?
Start by gaining clarity on your essential costs. Your spending habits will likely change once you stop working, but you’ll still have fixed expenses such as housing, food, insurance premiums, and utilities.
Then there are the less predictable costs: travel, hobbies, out-of-pocket health care payments, or helping family members.
Make a list of what your monthly expenses will look like in retirement. Categorize them as “needs,” “wants,” and “unexpected.” Once you see where your money will be going, you’ll be better equipped to determine whether your income sources will be enough to cover it all.
Are Your Income Sources Reliable and Diversified?
The average American 65-year-old today can expect to live another 20 years. One of the biggest concerns people have as they enter retirement is running out of money.
That concern is valid but manageable. The key is making sure you have multiple income streams that are both reliable and appropriate for your risk tolerance and goals.
Your income may include Social Security, personal savings, pensions, annuities, or income-producing investments. Each of these plays a different role. Some are designed for stability, others for growth. The more diversified your sources, the more protected you may be from economic uncertainty.
Now is a good time to review your asset mix. Is it still aligned with your retirement horizon? Is your portfolio generating enough income without taking on unnecessary risk? These are questions worth revisiting regularly with your investment counselor.
Have You Accounted for Healthcare and Long-Term Care?
Healthcare can become one of the largest expenses in retirement and it’s often underestimated. Even with Original Medicare, retirees are still responsible for premiums, co-pays, and services that aren’t covered, such as dental and vision care.
Additionally, there’s the possibility of needing long-term care. This could mean help with daily activities at home, or a stay in an assisted living facility or nursing home. These costs can be substantial, and they aren’t typically covered by Medicare.
Have you explored your options for managing these potential costs? Some people consider long-term care insurance. Others look into setting aside a portion of their savings or using specific investment vehicles designed for future healthcare needs. Whatever your approach, the important part is making sure you’re not caught off guard.
Conclusion
No retirement plan is perfect, but the strongest ones are built with clarity, intention, and the flexibility to adjust over time. By asking yourself these three questions, you’re not just checking a box—you’re taking ownership of your future.
If you’re unsure how to start assessing your current strategy, try our free retirement calculator. For a more in-depth review, you can also meet with an investment counselor at David Lerner Associates. We can help you evaluate where you stand and show you what adjustments, if any, can help you move closer to a more secure retirement.
Material contained in this article is provided for information purposes only and is not intended to be used in connection with the evaluation of any investments offered by David Lerner Associates, Inc. These materials are provided for general information and educational purposes based upon publicly available information from sources believed to be reliable– we cannot assure the accuracy or completeness of these materials. The information in these materials may change at any time and without notice.