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Questions to Ask Your Advisor Throughout Your Retirement Transition


The importance of having a well-conceived, comprehensive retirement plan cannot be overstated. Without one, you leave too much to chance at a critical time in your life. Even with one, the changing dynamics of your personal circumstances and the world around you require constant adjustments in your plan.

That’s why it’s important to work with a fee-only financial advisor (like myself), whose responsibility is to help you monitor your plan and recommend adjustments to ensure you are always on course. Your responsibility is to ask the right questions to make sure all of your concerns are addressed before during and after the transition into retirement.  Here are some examples of the questions you might ask your advisor in each phase.


Questions before Retirement 

The five years before retirement is like the glide path of a plane coming in for a landing. You may be on course, but you need to be recalibrating your approach the closer you get. You should have all of your ducks in a row – your retirement budget, asset allocation, savings withdrawal plan, Social Security plan, Medicare and your estate plan. Your advisor is your co-pilot, so you need to be asking them questions to confirm you are on the right course.

Am I still taking the right amount of risk with my investments to generate the rate of return I need? Your risk-return profile will change as you get older and transition through major life events. This should be checked periodically.

Is my asset allocation where it needs to be? It is important to ensure your retirement portfolio is properly rebalanced each year to ensure it maintains your target allocation.

When would be the best time for me to begin Social Security benefits? If your other income sources are sufficient to meet your income needs, delaying benefits can be a viable option. Alternatively, if you do not have longevity in your family or need the income sooner, you can collect as early as 62.

Is my estate arranged in the best way to maximize benefits for my spouse and children? You should also make sure you have a power of attorney and medical directives in place.


Questions during Transition

All of the questions you need to ask before retirement are just as pertinent during and after the transition into retirement, so they should be asked again. In addition, the following questions would be important to ask during your transition into retirement.

Based on current circumstances – mine and the economy – is the planned draw down rate on my savings and investments still appropriate? You may have planned for a 4% draw down rate based on previous assumptions that may not still apply. You should have your advisor recalculate your draw down rate each year based on your goals and current account balances.

What order should I begin withdrawing from my various savings accounts to minimize taxes? This should be revisited in years when your tax situation or the tax code changes. Generating an income plan is one of the key jobs an advisor should educate you on and explain as you transition into retirement.


Questions after Retirement 

In addition to the questions asked earlier, you might ask the following:

I’m considering starting a new career, part-time; how would the added income affect the draw down rate on my income sources and how would it affect the taxation of my Social Security benefits? Any change in your income situation should prompt a reassessment of your draw down needs and tax implications. It’s for this reason I like working closely with client’s CPAs when planning.

Should I be concerned about Required Minimum Distributions (RMD)? You should be looking ahead to age 70 ½ when the RMD rule kicks in. RMD requires that you take a minimum withdrawal from your IRA or 401(k) if the amount you have accumulated exceeds a certain threshold. Taking RMDs could increase your taxes and not taking them at the required times could result in penalties.