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7 Retirement Questions We Help Our Clients Answer Thumbnail

7 Retirement Questions We Help Our Clients Answer

Estate Planning Investment Planning Social Security Tax Planning Retirement Planning

Many of our clients are retired.  Interestingly, a lot of our retired clients actually never worked with a financial planner until they retired.  After all, as long as you have a successful career, spend less than you earn, and invest prudently for the long term, you might not need a financial planner. 

But when you retire, things change.  After all, you no longer have the stability that comes from having a steady job or owning your business.  And the simple mindset of “spend less than what you earn” no longer applies.  So, you might have more questions than answers as you enter this new phase of life. 

Here are 7 questions that we’ve helped our clients answer over the years. 

Question #1:  Can we afford to retire? 

By far, this is the biggest question we get from clients or prospective clients.  However, there is more than one way to ask this question.  For example, the question might be one of the following: 

  • I want to retire by a certain date.   

  • I want to go to a part-time job, then eventually retire. 

  • If I keep doing what I’m doing, can I afford to retire in XX years? 

Of course, there is no simple answer to this question, regardless of how it is asked.  And while the answer depends somewhat on how much you’ve saved, it is more dependent on what you plan to do in retirement. 

Question #2:  What can I afford to do in retirement? 

The answer is pretty simple: “The less you plan to spend in retirement, the sooner you can retire on your own terms.”  But people don’t always want to do less, particularly those who have worked for 20, 30, or even 40 years.  When you’ve worked this long, odds are that you’ve probably made sacrifices along the way.  If you’re a parent, you undoubtedly sacrificed a LOT to help your children succeed.  Retirement is supposed to be YOUR time, right? 

Our clients feel the same way.  Most people want to travel to places they’ve never been.  People who are collectors or hobbyists want to be able to spend more on their passions.  Charitably inclined folks want to contribute more or spend more time with the causes they support.  And virtually every parent who has adult children either wants to spend time with their grandkids or is patiently waiting to become a grandparent.   

Our goal is to help our clients become confident that spending money on the important things doesn’t compromise their retirement.  One way we do that is to help them understand their cash flow.  

Question #3:  How does my cash flow work? 

For most of our adult lives, cash flow works like this: 

  • You get a job (or own a business) that produces income 

  • You spend money on things you need 

  • You save the difference (hopefully) 

Done correctly, you should eventually accumulate enough wealth so that you no longer have to keep earning a paycheck.  In retirement, this changes dramatically. 

Unlike our grandparents’ generation, most of us don’t have a pension to fall back on.  As a result, we have to take our proverbial stack of money and figure out how to make it work. 

We usually help our clients with this by ‘creating’ a cash flow that works for them.  In this, we help our clients set aside enough cash to give them a steady ‘paycheck,’ while investing the remaining funds in accordance to our agreed investment philosophy.  As we occasionally rebalance our portfolio, we’ll either: 

  • Set aside additional cash as we need it, or  

  • Invest excess cash that isn’t needed, so it continues to work for us 

Of course, in order to ensure the most efficient cash flow, we need to take into account taxes. 

Question #4:  How can I keep my taxes as low as possible?  

This is an interesting question, especially since most people think that this is a question for your accountant or tax professional.  We believe there are two dimensions to this: 

  • Keeping taxes low in the current tax year 

  • Minimizing the tax that you pay over the course of your lifetime. 

Throughout your career, most of your focus is on keeping your taxes down in the current tax year.  If you’ve been contributing to your IRA or 401k, you’re likely doing so because there is a current-year tax benefit (unless you’re contributing to a Roth account, in which case you’re looking to shelter future income from taxes). 

We also help people who are charitably inclined to ensure their charitable contributions are as tax-efficient as possible.  That way, more of their hard-earned money goes to support the causes they feel passionate about. 

When we focus on Roth conversions and charitable giving, we naturally answer another commonly asked question. 

Question #5:  What about my IRAs? 

Having spent most of their lives saving into their IRAs and 401k plans, many people naturally have questions about them as they retire. 

  • Do I have to take money out when I reach age 70 ½, even if I don’t need to use it? 

  • Can I contribute to charity instead of taking out my required minimum distribution? 

  • How can I keep taxes low? 

There are several things that you can do with your IRAs & employer-sponsored retirement plans.  Two of the most common ways we help our clients are with Roth conversions and with qualified charitable distributions.   

Roth conversions:  In retirement, most peoples’ taxable incomes decrease significantly as they no longer have wage or business income.  As a result, there is a great opportunity to move money from traditional 401(k) accounts or IRAs (where withdrawals will eventually be taxed in most cases), to Roth accounts, where withdrawals come out tax free. 

But in order to do this, you must pay some taxes on the conversions.  Doing this requires you to sacrifice the goal of minimizing this year’s taxes for the possibly greater goal of minimizing the taxes you pay over the course of your retirement.   

One of the best ways to do this is to spread your Roth conversions over as many years as possible.  Of course, this requires us to: 

  • Develop a long-term Roth conversion plan for each client, 

  • Evaluate taxes each year to ensure we’re converting the proper amount 

  • Incorporating any major changes into our plan 

Charitable giving:  We do not ask any of our clients to give to charity just to reduce their taxes.  However, we do ask our charitably inclined clients to share information with us so that we can incorporate tax-efficiency into their gifting plans.  There are several ways our clients do this: 

  • Qualified charitable distributions.   

  • Donor-advised funds 

  • Gifting appreciated assets, such as stock or mutual funds 

Question #6:  When do I take Social Security? 

Generally speaking, the longer you wait to take Social Security, the better off you’ll be.  This is particularly true for people who live a long time.  But it’s not always the case. 

Regardless of what the numbers say, Social Security is a very sensitive topic for many people.  We take the time to help our clients understand: 

  • Whether they’ll be better off taking Social Security early or later, in their situation 

  • How they can support their living expenses if they choose to delay Social Security 

  • How taking Social Security early might impact their retirement plan 

  • In which situation they might be better off not waiting 

Question #7:  What about long term care? 

No one likes to talk about long term care.  Having this discussion presumes what many people dread the most:  “Who’s going to take care of me when I get old?”  And no one wants to think about that. 

But getting old happens.  And long-term care can be expensive.  Fortunately, there is a wide variety of long-term care options for most people.  Of course, it takes time and effort to research and discuss those options.   

We do this for our clients, and we also help our clients understand how their long-term care plan fits in their overall retirement plan. 


If you find yourself wondering what life looks like in retirement, just know that you’re not alone.  Even if you’d DIY’d your finances your whole life, retirement presents unique challenges that you’re probably facing for the first time.  And if that’s the case, schedule a consultation with us now.  We’d be more than happy to see how we might be able to serve you. 


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