Retirement Planning - Preparation Questions: ARTICLE

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Answer These Questions to Help Prepare for Retirement
 By Shane Flait © 2012

Here’s a way to taking control of your retirement. It’ll make you feel comfortable and assured. Just answer these questions to get you into the swing of things. Searching out their answers will put you in control.

 

The questions are grouped according to 7 basic retirement planning areas:

1.      Your company retirement plans

2.      Retirement income

3.      Investments

4.      Healthcare

5.      Long-term care

6.      Your wishes at incapacity and death

7.      Gifting and legacy plans

 

The nitty gritty decisions to make:

Understanding what income you’ll receive under a defined benefit plan is the first component to constructing your retirement income. If you have an option to take a lump sum instead, you may use it to find a better paying annuity.

 

Next, obtain your benefit statement from the Social Security Administration. If you’ve made an estimate of you retirement expense, then you have a handle on what income you’ll need. That estimate less your pension and Social Security incomes determines how much you’ll need to withdraw from your investments annually.

 

You then need to allocate your investment portfolio to generate that withdrawal income. If this withdrawal income will deplete your investments before you die, then you’ll need to adjust the withdrawal to a ‘non-depleting’ level. This will force you to adjust your living expenses downward accordingly.

 

Be sure to signup for Medicare one to three months before you turn 65 and decide on which of several supplemental healthcare insurance plans are best for you. 

 

If you haven’t yet looked into how you’ll handle long term care (LTC), you should do it now. That’s so that if you opt for buying LTC insurance, you’ll want to do it as early as possible to minimize premiums that increase significantly with age.

 

Also, arrange for how you and your affairs should be handled if you become incapacitated – even temporarily.

 

Lastly arrange for how best to leave your assets to your choice of beneficiaries. Taxes and long term care can take a big bite out of your assets if you don’t develop a good strategy to by pass them

 

Refer to the table for the specific questions under each area.  Your answers should address the items of consideration also listed for each area.

 

 

Question List for Your Retirement Planning

Issue Area

Associated Questions

Considerations

Company Retirement Plans

·         What are your payout options for defined benefit plan?

·         How will you take your defined contribution plans?

·         Annuity

·         Lump sum

·         Rollover

 Retirement Income

 

·         Did you contact Social Security for your benefit statement?

·         What's your Company Pension income?

·         What withdrawal rate should preserve your income for 30 years?

·         Your income needs estimated

·         Approximate Required Minimum Distributions

·         Company Pension indexed to inflation?

·         Ideas to minimize expenses

Investments

·         How will you allocate your investments for retirement

·         What specific investments will you choose

·         Allocation strategy

·         Investment choices and risk

 Health Care

·         When should you sign up?

·         What are your health insurance options?

·         What's the best plan for your situation?

·         Medicare,

·         other Medigap-type supplemental plans

·         Employer-sponsored health insurance

Long Term Care (LTC)

·         Have you considered purchasing LTC insurance?

·         Have you worked out the possibility of paying LTC costs directly?

·         LTC insurance rates

·         Plan for Medicaid assistance

·         Direct Payments of LTC

Your Wishes at Incapacity and Death

·         Have you arranged for someone to take over when you are incapacitated?

·         How will someone know your wishes when you're incapacitated or die

·         Health care proxy

·         Durable Power of attorney

·         Will

·         Trusts

Gifting and Legacy Plans

·         Have you chosen and updated your beneficiaries on all insurance, qualified plans, will and trusts?

·         Have you considered the most tax-efficient way to gift your money or leave it as a legacy?

·         Annual gift tax exclusions

·         By-pass trusts

 

 

 

 

 

 

 

 

 Shane Flait is a writer and educator. See more at www.EasyRetirementKnowHow.com