With retirement on the horizon, it’s imperative to consider several key financial factors before entering what may be the most enjoyable and relaxing time of your life. If you bypass these considerations, there is a significant chance you’ll end up with less money saved.

Therefore, to boost your retirement savings, ask yourself these seven key questions:

#1 – Does my ability to afford retirement depend on Social Security benefits?

According to Kevin Woods, CFP® and Director of Financial Planning at Gratus Capital, the answer to this question will ultimately determine when to begin collecting Social Security. It’s important to know that if you postpone collecting Social Security benefits by four years, from age 66 to age 70, you’ll receive additional Social Security income. However, many investors neglect to run a breakeven analysis regarding this income postponement.

Keep in mind that it takes about 11 years to reach the breakeven associated with delaying your benefits until age 70. Specifically, it isn’t until every year past age 81 that you’ll begin to receive more overall from Social Security than if you started collecting at age 66.

Beyond pressing financial needs, another key determination of when to begin collecting Social Security benefits is your health. Waiting 11 years may be a long time for some individuals, but not others. Ask yourself how healthy you are and if your parents lived well into their nineties? If so, then it may make sense for you to postpone taking Social Security.

Overall, without running a breakeven analysis, you won’t have a complete financial picture.

Helpful Resource: The Social Security Administration offers a simplified document explaining when to start receiving retirement benefits.[i]

#2 – When should I enroll in Medicare medical insurance?

“Every 65-year-old should enroll in Medicare Part B, whether retired or not,” said Woods. “If you don’t enroll during the enrollment period for Medicare Part B or prescription drug coverage, you run the risk of being charged higher premiums for the rest of your life. There is a seven-month window for enrolling in Medicare Part B, beginning three months before you turn age 65. Also, you’ll want to research supplemental insurance coverage, which could ultimately save you thousands of dollars in retirement.”

Helpful Resource: Detailed instructions for applying for Medicare.[ii]

#3 – What is the tax impact on my retirement savings?

Your Individual Retirement Account (IRA) savings are not all yours,” said Woods. “Expect to pay roughly 25 to 30 percent of your Traditional IRA or 401(k) savings toward taxes. For example, if you believe you have $80,000 to live off each year, yet haven’t accounted for taxes, then in reality your income is closer to $55,000 after taxes.

Also, keep in mind that you may need to pay taxes on your Social Security benefits.[iii]

#4 – Should I hold onto my life insurance policy?

There are a couple key reasons to maintain life insurance policies throughout retirement.

First, it’s important to conduct a liability risk review. Specifically, if you’re sued during retirement, ask yourself how much of your nest egg is exposed? Keep in mind that an IRA is only protected up to the first one million dollars. This becomes particularly important if you’ve rolled other financial funds into this one vehicle, surpassing the protection threshold.

In many instances, and depending on the structure of your policy, life insurance assets are protected from creditors and other judgments. However, without a comprehensive risk analysis, it’s difficult to determine whether continuing to pay life insurance premiums makes sense or not.

Second, some investors have single-life pension benefits that end upon the insured person’s death. This loss of income could negatively impact your spouse or another loved one.

#5 – Can I afford to continue my charitable giving in retirement?

Having a fixed income in retirement doesn’t mean that there isn’t room for charitable giving in your financial plan. Consider giving a percentage of either your total net worth or of your annual net income.

Let’s say you’ve been earning $300,000 annually for the past many years and donating five percent of your annual income meaning $15,000 each year. Then, consider the same approach in retirement.

For example, if your retirement income is now $150,000 per year, you could continue to contribute five percent ($7,500) in annual giving. “This way you can continue to make a positive impact within your community, yet realign your approach with your revised retirement income,” said Woods.

Helpful Resource: Comprehensive Charitable Giving: 7 Steps to Create Positive Impact & Change

#6 – What am I retiring to?

Have you considered what your retirement days will look like 365 days a year, year after year? Many pre-retirees neglect this important process. Will you volunteer, golf, travel, watch your grandchildren or something different altogether? If so, how often, and what will you do with your remaining time beyond these activities?

According to Woods, picturing the life you’ll pursue while retired is a critical planning step towards experience a fulfilling retirement.

#7 – Should I pay off my mortgage?

“If at all possible, retire debt free,” said Woods. “At the very least, own what you can afford since you’ll be using your retirement savings to pay off your mortgage. The years just before retiring are an excellent time to reset your mindset regarding spending. For example, if the new Lexus you want today at $50,000 equals five percent of your future retirement savings, are you still okay with this purchase? Only you can decide. However, the closer you are to retiring, the more aware you should become about large purchases as well as other long-term financial commitments and their respective impact on your retirement savings.”

In Closing

The questions to ask yourself in preparation for retirement can sometimes seem daunting. The sooner you start tackling these questions, the better. We can help.  If you have questions pertaining to any element of your financial life, including retirement, estate, insurance, tax and philanthropic planning or asset management, please contact us.

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The above article is intended to provide generalized financial information; it does not give personalized tax, investment, legal, or other professional advice. Before taking any action, you should always seek the assistance of a professional who knows your particular situation for advice on taxes, your investments, the law, or any other matters that affect you or your business.


[i] https://www.ssa.gov/pubs/EN-05-10147.pdf

[ii] https://www.ssa.gov/medicare/

[iii] https://www.fool.com/retirement/general/2016/04/30/is-social-security-taxable.aspx