Counting Down to the Retirement Race Start Gun? Wealth Advisor in Houston Poses 10 Questions

Whether you got an early jump on your retirement planning or a late start, the handful of years leading up to the big day could be some of the most important. If you can cover your financial bases during this timeframe, you have a better chance of keeping your Golden Years golden. After 50 years of acting as "trainer" to coach people preparing for what hopefully is a marathon, we've learned a few things. To that end, here are 10 important questions to ask as you near retirement:

1. Am I On Track to reach my goals?

To better answer this question, you’ll need to be clear about what your financial goals are. What sort of annual returns will you be seeking? And more relevant, will those returns be enough to support your retirement spending? If you’re further behind than you had hoped, there are steps you can take to get back on track, but identifying the problem is key. 

2. Have My Plans for Retirement Changed?

You may have had big ideas for retirement when you initially created your financial plan, but have those goals changed? Did COVID-19 change how you want to spend your days? Has your family grown since you first made plans? Has your family gotten smaller? 

As retirement gets closer, revisit your retirement date, your retirement lifestyle, your planned retirement geography and your ideas for day-to-day living.

One client of ours who spent his entire life living in the Houston, Texas area, based his planning on the idea that he'd remain in Houston for the remainder of his life through retirement. That was a solid plan until his son and daughter-in-law got a job transfer moving them to the Philadelphia area. Their move meant the grandchildren were also moving! And that meant that the grandparents desired to move also. Between the general cost of living and state income taxes, the cost of being comfortably retired in Philadelphia is considerably higher than Houston. Fortunately for this client, their margin of safety in their financial modeling was sufficient that this change  in location did not present a major obstacle. 

In the event that any of your financial goals change (at or during retirement), you may need to adjust your savings, your risk level or even your current spending habits. Your goals are what drive the bulk of your financial plan, so make sure they stay top of mind.


Are you still on track to retire as planned? contact the team at Linscomb & Williams and get a second opinion.


3. Does My Withdrawal Strategy Still Make Sense? 

When the rubber meets the road, your retirement plan manifests as a withdrawal strategy. All of your retirement assets and cash sources, such as Social Security, retirement accounts and a pension, will eventually be withdrawn and used to support your lifestyle. What will that look like? Thorough and robust modeling of these numbers is important. 

Remember, the general 4 Percent Rule doesn’t always work.

To determine a realistic withdrawal strategy, you have to consider your specific needs and wants in retirement. If you’re unsure, talk with a wealth advisor. 

4. Has My Income or Overall Financial Situation Changed?

Even small changes to your financial life can add up to big transformations over time. Taking a new job, launching a new business or cashing out a retirement plan early can significantly alter your financial picture. As retirement approaches, it’s important to confirm if it’s still a reasonable probability that your numbers will work. Don't give up a regular paycheck without checking this box. 

Read our recent blog post: 4 Real-Life Examples of How Retirement Planning Can Innocently Go Wrong.

5. Does My Plan for Healthcare Still Make Sense?

Securing the right healthcare coverage in retirement can be tricky. If you’re retiring earlier than expected, is Medicare still an option? Managing coverage, co-pays, deductibles and out-of-pocket expenses can be difficult and stressful. If you’re unsure about what coverage you need, discuss your options with a wealth advisor you trust.

6. Are There Any New Strategies I Haven’t Considered?

Jumping into the newest trend right before retirement can be risky, but are their tax breaks or exceptions you may qualify for now that you didn’t five years ago? Do your homework. Discuss your situation with a wealth advisor you trust. If there’s any opportunity to maximize your retirement savings at the finish line, you'll want to take advantage. 

The first few years of retirement can be important if they are occurring during your 60s. Those are what our experienced team of analysts refer to as the "flex years." Those are years when you have a lot of control of the income hitting your tax return because you have unrestricted flexibility on retirement account withdrawals, Social Security elections and part-time work. Balancing some of those decisions right during the flex years can pay nice dividends in the two decades that follow.

7. Has Inflation Affected My Plan?

Inflation can ruin even the best-laid plans. Though it’s difficult to see the effects of rising prices, your buying power can dwindle if your financial plan doesn’t account for inflation. Luckily, there are ways to protect yourself. And managing inflation, among many other risks, is extremely important to the long-term health of your retirement savings.

8. Can I Do More to Maximize My Working Years Before Retirement?

With your retirement date on the horizon, are you making the most of your income? Are you contributing the maximum amount to your 401(k), taking full advantage of any employer match and making your annual bonus work as hard as you did to get it? Even the little benefits you have at your disposal can go a long way in your retirement. Anything that can take the pressure off of you needing to take Social Security benefits early or sell your investments to cover monthly expenses can be a big financial benefit.

9. How’s My Health?

Healthcare is many retirees’ biggest expense in retirement. Knowing your healthcare needs is the key to properly planning for them. Being financially ready for your healthcare expenses can actually have a positive effect on both your physical and financial health. No one likes expensive surprises, especially when you’re on a fixed income. 

10. Should I Get a Second Opinion?

If there’s ever a time when a wealth advisor can help, it’s in the "countdown" years leading up to retirement, either to help you navigate the transition, ensure you’re on the right track or to maximize any retirement planning strategies you’re currently leaning upon. 

If you’re unsure of your current financial situation or just looking for the peace of mind that can come from getting a second opinion, now’s the time. As mentioned earlier, the years leading up to your retirement are critical, so working with a wealth advisor, even for a general checkup, can have a big impact. In seeking a wealth advisor, look for a 100 percent fiduciary model advisor who is evaluating strategies solely based upon what is in your best interest and not seeking to sell you financial products.

If you are off track, a financial review can help you pinpoint ways to catch-up, be it through catch-up contributions to your retirement accounts, eliminating debt or cutting back now so you have more for later.

At Linscomb & Williams, our team of fee-only, fiduciary wealth advisors in Houston, Texas; Atlanta, Georgia; and various locations in Alabama are ready to help. For 50 years, we’ve helped clients both locally and nationwide plan for the future. Don’t put it off. With retirement approaching, “later” is not an option and "panic" is not a strategy.


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B. Craig Ivy, CFP®

B. Craig Ivy, CFP®

B. Craig Ivy is a Director and Wealth Advisor for Linscomb & Williams.

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Investment Advisory Services are offered by Linscomb & Williams, an SEC registered investment adviser, and a subsidiary of Cadence Bank. Linscomb & Williams (L&W) provides financial planning, investment management, and retirement plan and investment consulting services. L&W is not an accounting firm, and does not provide tax, legal or accounting advice.

Information expressed herein is based upon opinions and views of L&W and information obtained from third-party sources that Linscomb & Williams believes to be reliable, but Linscomb & Williams makes no representation or warranty with respect to the accuracy or completeness of such information. All opinions and views constitute our judgments as of the date of writing and are subject to change at any time without notice.