4 Non-Investment Questions to Ask an Advisor Before Retiring | Personal finance

Kate Ashford, CSA®

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Using a financial advisor for your investment needs is 100% on the mark, but what about the other parts of your retirement life? For example, one-third of people aged 64 and over have a financial advisor, but only 2% of them asked their advisor to help with their Medicare choices, according to a July 2022 report from the consulting firm. Healthcare Sage Growth Partners.

But Medicare and other non-wallet matters, such as travel and long-term care, can impact your finances.

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“We are actively bringing these ideas to our clients, but there are still many consultants out there who aren’t,” says Crystal Cox, a certified financial planner in Madison, Wisconsin. “They are still focused only on investments and the portfolio.”

Here are some questions to ask at your next meeting.

1. What retirement decisions do I need to think about?

Your retirement life may not continue as it did in the past. Are you planning to travel? Are you planning to move to a different state or downsize? How often will you want to buy a new vehicle?

“Most people just think, ‘I need a certain amount of money to live,'” says Daniel Lash, a CFP in Vienna, Virginia. “And all the ancillary things that accompany life? All the things you want to do? “

Retirement plan mapping can help you and your advisor identify when and how you will need cash.

“Do you have an idea of ​​where you will be moving and what the properties in that general area look like?” says Lash. “They thought about retiring, not ‘What will I do when I retire?'”

2. What do I need to know about Medicare?

While you typically can’t sign up for Medicare until you’re closer to 65, your income in previous years will affect what you pay for coverage. Each year, both Medicare Part B and Medicare Part D base their premiums on the modified adjusted gross income reported two years ago. So, if you filed individually making more than $ 91,000, or jointly filed making more than $ 182,000, you will pay additional amounts each month.

“Since there is a look back on earnings for Medicare expenses, we will adjust the plans accordingly, because they could pay a lot more in the first two years in retirement than after retirement,” Lash says.

It is also wise to consider guidance on Medicare choices in general, because sometimes you can’t change your coverage later if your health situation changes and Medicare is complicated. “We do an annual meeting with someone who specializes in Medicare,” Lash says. “All customers are welcome to participate.”

3. Can I afford to self-insure myself for long-term care?

A person turning 65 now has about a 70% chance of needing some kind of long-term care, and the costs are high – it’s $ 54,000 a year for an assisted living facility and nearly $ 95,000 for a room. shared in a nursing home, according to Genworth’s 2021 Insurance Cost of Care Survey.

“Some people are well enough to feel comfortable self-insurance,” says Kevin Brady, a CFP in New York City. “Others have more limited resources.”

Whatever the case may be, it is vital to discuss the potential costs and whether you have the savings to manage them. If not, you’ll need to check the numbers on products like long-term care insurance or a hybrid policy that combines permanent life insurance with a long-term care rider.

“We always work with an expert to screen and see what makes sense,” says Brady.

4. Do I have enough money to enjoy myself?

A successful retirement isn’t always a question of tangible things. For many, it’s time to fulfill travel dreams and other experiences, but spending too frugally can get in the way.

“Often clients are overly conservative for fear of running out of money, but they reduce the retirement experience in the process,” says Kevin Lum, a CFP in Los Angeles. “When they realize their abundance, they are too old to spend it.”

Talk to your advisor about your high ticket desires and whether you have enough money to spend a little bit before settling for a more leisurely expense.

Actual pension spending feels more like a smile than a straight line, Lum says, with more spending at the start on things like travel and more spending at the end for long-term care needs.

“I’m not saying people should spend irrationally,” says Lum. “But to think of retirement spending as a fixed calculation that doesn’t change during retirement is not a smart idea.”

This article was written by NerdWallet and was originally published by The Associated Press.


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