Five questions to answer to prepare for retirement

Retirement is a goal that is shared by virtually everyone who has ever had a job, but many don’t think about what retirement will mean for them until they are in their last few months of work. Preparing for retirement can make a huge difference in your quality of life, of course, but preparations transcend merely setting money aside and investing. Planning for what you want retirement to look like can be highly impactful as well. The uncertainty caused by the pandemic has compounded the issue, particularly for those at or near retirement.

When it comes to retirement, “how much money you need to retire” is not the only question you should be asking – and not even the initial one. There are a few key questions you should consider first to help determine what “retirement” means to you, which will help paint a clearer picture of that magic savings number. Before you pull out your calculator, consider these questions:

1. Have you considered a “second act” career in retirement?
According to a recent Charles Schwab survey for the launch of Schwab Intelligent Income , more than 40% of people within five years of retirement said they want to continue working in retirement. Whether you’re scaling back hours at your current job, planning to embark on a new career or pursuing a passion project, this has some tangible advantages when it comes to retirement planning. Along with the benefits of staying active, by continuing to earn a paycheck, you mitigate the need to deplete existing savings.

2. Would you rather take “mini-retirements” and postpone long-term retirement?
While most people still envision retirement as a point later in life when they stop working altogether, the idea of taking time off from work for extended periods – to travel, raise a family or simply take a break – at various life milestones is becoming more common. If this sounds appealing, it will require some diligent planning and saving along the way and will impact the way you think about saving for a traditional retirement down the road.

3. How important is it to leave a financial legacy?
Ask yourself, would you rather spend every penny or leave money to family, friends or a charity after you’re gone? This answer will impact your financial decisions in retirement. Estate planning isn’t just for the ultra-wealthy – most people should create a basic estate plan, including a will that outlines how you would like your assets to be distributed.

4. Do you and your spouse or partner have the same retirement lifestyle vision?
If you are in a relationship, it’s a good idea to get on the same page when it comes to retirement. Do you want to be active? Are you planning to stay in your current home or retire elsewhere? These questions will not only help determine how much you need to save, but also can inform whether you will merge your finances or keep some separate to meet differing goals.

5. Do you have a plan for funding your retirement once you decide to tap your savings?
You’ve spent most of your life saving, so before flipping the switch, make sure you have a plan in place for how to make those savings last. To do this, consider consulting a professional to create a retirement income plan and start with the basics:

  • Choose the right mix of conservative and aggressive investments to provide diversified sources of return.
  • Determine how much you need to withdraw on an annual or monthly basis.
  • Learn about products and services designed to help manage and deliver retirement income.

Successful retirements rarely happen by accident —they are designed. This is a process. It takes time, effort and careful consideration to be done well. A trusted advisor can provide invaluable advice and guidance. This may be your first time dealing with retirement; your advisor may have insight to offer from the retirements of many other clients to help further the conversation and provide perspectives you’ve never considered. Retirement is about much more than merely covering your cost of living. It’s about the freedom to pursue your interests in the comfort of knowing you have the finances covered. Having that freedom, however, is dependent on having planned well. Start the conversation now. The more runway you have between now and your actual retirement, the less difficulty you’ll encounter designing the retirement of your dreams.
For help thinking through these questions, you can visit a Charles Schwab branch. Schwab has also created a card game called “The Next Chapter” with more retirement questions to explore.

Levesque MarkverticalMark Levesque is a Financial Consultant at the Charles Schwab Independent Branch in Nashua, New Hampshire, where he has been helping clients achieve their financial goals since 2016. Some content provided here has been compiled from previously published articles authored by various parties at Schwab. Charles Schwab & Co., Inc., Member SIPC.


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1 The research was conducted through an online survey by Logica Research from June 27 to July 16, 2019, among a national sample of 1,000 Americans aged 55 and older with $100,000 or more in investible assets. Respondents self-defined as retired or within five years of retirement. The margin of error for the sample is three percentage points.

Investing involves risk, including loss of principal. The information provided here is for general informational purposes only and should not be considered an individualized recommendation or personalized investment advice. The investment strategies mentioned here may not be suitable for everyone. Each investor needs to review an investment strategy for his or her own particular situation before making any investment decision. The information provided is not intended to be a substitute for specific individualized tax, legal or investment planning advice. Where specific advice is necessary or appropriate, Schwab recommends that you consult with a qualified tax advisor, CPA, financial planner or investment manager. (0720-0NC0)
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