What Issues Should a Financial Advisor Consider as I Get Closer to Retirement?

As you get older and retirement approaches, there are a number of important issues that you must address financially in order to get ready for that big day. If you’re lucky, you’ve already been working with an advisor for some time and your portfolio is in good shape. By all appearances, you should be in the clear. But even if your accounts have earned you enough money to live on once you are done working, there are still some important issues that must be taken care of before you begin drawing on your retirement income. Working with a qualified financial advisor ensures that these issues are attended to in an expedient and professional way. Remember, financial advisors do this for a living. They have a wealth of experience anticipating and responding to important issues that come up in the lives of investors who are getting ready to retire in the near future.

When to Start Drawing Benefits

One important but sometimes overlooked area at least from the perspective of investors is in the actual payout of benefits from your retirement investments. By this time, you have spent many years contributing to your accounts and watching them grow. You’ve grown used to this pattern by now. As a seasoned investor accustomed to seeing your accounts increase and paying into them on a fairly consistent basis through the years, it can be surprisingly difficult to make the mental adjustment needed to think about these investments as your source of income going forward. Someone who has been a diligent saver all along will find it especially hard.

But this is what you have been saving for all along. If you are getting to the point when you can stop punching in that time clock every day, these investments you’ve so diligently harvested all these years will start to come into play as a source of funding for your everyday needs. So you need to work with your advisor on some very specific answers to a few basic questions about these accounts as the big day approaches: when are you finally going to hang it up for good? When will you need to start receiving benefits? What will the tax consequences be for this particular choice of a date? Certain investments are taxed on the front end, but others are untaxed until you draw from them at retirement, and rules may be in place to affect the tax burden based upon your age at the time of withdrawal.

Other Important Pre Retirement Considerations

Aside from the obvious question of when and how to draw your benefits, there are several other important ones you’ll want to talk about with your financial advisor. Again, remember that financial professionals help people get ready to retire every day, so they are the ideal people to help with these retirement questions. Talk about your living situation in terms of how long you’d like to stay in your home. Discuss your insurance situation and whether any changes will need to be made. And of course, you’ll want to talk about your estate plan. Even if the two of you already have a good estate plan in place, it is always a good idea to take a close look at it as your retirement approached to make sure everything is in order and that it reflects your current circumstances and wishes.

As the day of your retirement draws near upon you, it is smart to take the time to retrace your path and make sure everything is in order.