John E. Chapman Chief Executive OfficerIn a recent Wall Street Journal article (“Wealthiest Classes Voice Economic Angst”, 6/21/26), a poll found that more than 40% of Americans who call themselves upper or upper-middle class say they haven’t saved enough money to retire comfortably. Additionally, only 40% of these groups say that their financial security is where they thought it would be as they approach their retirement years.
While financial considerations are important, there are questions that go beyond “dollars and cents” that should also be considered prior to entering retirement.
In working with many people who are approaching retirement or newly retired, they ask me many important questions. I am sharing some of the most common questions I hear in order to help you as you weigh whether you are prepared for retirement. Because, no matter what, when you retire, it is a new phase, and there is much to learn!
- How will you spend your time?
You have stopped working…and now what? Entering retirement is exciting, but it is also a massive transition. For those who have not thought about a plan for how to spend time in a fruitful manner, abruptly going away from a 40-hour+ work week with daily interaction with others can bring a lack of sense of purpose or a loss of community over time.
You probably envision yourself spending more time working on hobbies you enjoy? Travelling? Being with your family? Enjoying your favorite recreational activities? While initially exciting, quite often filling up the days with such activities over the longer term may become somewhat routine, and yes, even boring. It is for that reason it becomes important to consider: What will truly fulfill you during your retirement years?
For those who are married, another consideration which is often overlooked is that up until retirement, you each had your own daily routines. Recognizing that you might be spending exponentially more time with your spouse is one of the most crucial aspects of retirement planning, possibly more hours together than at any prior point in your marriage. How will that work for you?
Overall, knowing what you are retiring to rather than just what you are retiring from is very important.
- Where will you live?
There are many factors involved when deciding whether relocating to another state makes sense for you, including climate, being closer to family and friends, or a lower cost of living. While moving to a new place after you retire can be an exciting event, it requires extensive research and a clear understanding of what you want your retirement years to look like.
Besides moving to an area with a more favorable climate, the goal of minimizing expenses, including taxes, is often near the top of a retiree’s priority list. When considering moving to another state, the potential impact of future taxes needs to be researched as the burden of taxes often comprises a large portion of a retiree’s overall cost of living.
As I wrote in “Are you considering relocating to another state?” (June, 2025), tax rules differ from state to state, sometimes by significant amounts. This underscores the importance of researching income taxes, property taxes, sales taxes, and inheritance taxes.
Bottom line, understanding the various taxes from one state to another and how they may impact you is very important prior to making a relocation decision.
- Do you have enough to live comfortably?
Don’t trust your financial future to guesswork! It will be key for you to have a well-built retirement cash flow plan that incorporates your retirement account assets, your expected sources of retirement income, and your realistic spending plans during your retirement years.
Realistically evaluating your future spending needs prior to retirement will be important, not only for your needs for the first few years of your retirement, but also in the later years when your travel and lifestyle spending may decline. Many people assume that overall expenses will decline after that initial period when you are likely to be healthier and more able to enjoy your recreational hobbies. That is not always the case, though, as healthcare and long-term care-related costs, among others, often replace early retirement stage expenses.
Having a clear picture of your expected expenses can help you evaluate whether the combination of your income sources and investment portfolio will be able to support your lifestyle throughout retirement. Customized financial income modeling of your situation, before you retire, can help to reveal what changes you might need to make in order to increase your odds of meeting your long-term retirement goals.
- Have you adjusted your investment portfolio to align with your needs?
As your financial situation transitions from earning a regular paycheck to relying on savings, proper asset allocation and diversification can help to protect your retirement nest egg from severe market downturns while ensuring you have enough liquidity and cash flow to cover your daily living expenses
Diversifying your portfolio asset mix across different types of investment asset classes (i.e., U.S. and international stocks, bonds, alternative assets, real estate, and cash equivalent investments) can help to prevent a decline in value of a single investment area from devastating your entire portfolio.
Having a properly diversified, balanced portfolio with income-producing assets can also enable you to generate a consistent stream of income to cover your bills without being forced to sell an investment during an inopportune time, such as during a market or sector downturn.
Remember that your retirement may last for decades, and it is important to continue to retain a suitable allocation of growth-oriented investments, such as quality stocks. This will provide your overall investment portfolio with the potential to keep pace with the rising cost of living.
It is also vital that your overall asset allocation aligns with your personal risk tolerance. Even though history has shown that a portfolio of quality stocks has increased in value over time, there are periods when stocks decline in value. How would a decline in the value of stocks that you own in your retirement account(s) affect you? If such a decline would prevent you from “sleeping at night”, that is likely a good indication that your investment portfolio has too much risk.
- What do you need to know about taxes, future taxes, and tax strategies?
It is important to understand that different retirement accounts are taxed differently. While Roth IRAs and Roth 401(k)s offer tax-free withdrawals in retirement, traditional 401(k) and traditional IRA withdrawals are taxed as ordinary income. Withdrawing heavily from pre-tax accounts can unnecessarily bump you into a higher income tax bracket, as well as possibly subject you to other taxes.
Required Minimum Distributions that need to be taken annually from pre-tax accounts when reaching a certain age (75 for those born after 1960) can often push income levels about certain thresholds that trigger other taxes. Those include the Net Investment Income Tax (NIIT) and the Medicare Income-Related Monthly Adjustment Amount, or Medicare IRMAA (“What is the Medicare IRMAA?”; www.ccpwealth.com; January, 2026 has more information on this topic).
Having a strategic plan regarding the timing of taking withdrawals from your various savings and investment accounts could not only reduce the impact of taxes on you over time, but also could have a major impact on whether you will be able to meet your future long-term retirement cash flow needs.
- If you’re eligible to receive Social Security, when should you start to receive your benefits?
There are many factors that go into when to start taking Social Security, including your need for income as well as your expected lifespan. Claiming early at the age of 62 will permanently reduce your monthly Social Security check by up to 30%, while waiting until age 70 maximizes your lifetime payment.
If you expect to live past 80, waiting at least until your Full Retirement Age – which is 67 for anyone born in 1960 or later – will yield a higher total lifetime Social Security payout (Schwab.com).
- What will you do regarding health insurance coverage if you aren’t eligible for Medicare yet?
70% of Americans retire before they are eligible for Medicare (Employee Benefit Research Institute, 2023). Health insurance is quite often one of the highest expense items for those retiring prior to being able to enter the Medicare health insurance program. Because of this, it becomes very important to evaluate the various options available, plan for covering the cost of health insurance, and choose the best option prior to entering retirement.
Among the several health insurance policy options that exist to help manage your healthcare expenses in early retirement are those offered on the Affordable Care Act (ACA) Marketplace. Finding a private health insurance plan or continuing on your employer’s health insurance plan through COBRA (the Consolidated Omnibus Budget Reconciliation Act) are also popular options for early retirees. Each of the various policy options has its own benefits and costs, which is why it is important to research and compare the policy details before deciding what might be best for you.
- Do you have a plan for covering possible long-term health care needs in the future?
Almost 70% of people turning 65 will require some form of long-term care during their lifetime. The cost of such care depends on the type of care desired. For example, in the Chicago suburbs, the average monthly cost for full-time at-home care currently ranges from $5,600 to $6,600 (www.care.com).
Covering the cost of long-term care can have a major impact on your retirement savings, thus the reason for planning for this cost in advance. Because traditional health insurance and Medicare generally do not cover extended daily assistance, many individuals explore whether long-term care insurance is a suitable alternative for covering such costs, rather than tapping into your retirement savings.
There are several types of long-term care insurance policies these days, including hybrid policies, which are life insurance policies with a Long-Term Care insurance rider. One of the benefits of this type of policy is that if you do not use the policy proceeds for your long-term care needs, there will be a death benefit left for your heirs.
- Have you updated your estate planning documents?
Estate planning and updating necessary estate planning-related documents is crucial. Suitable documents to consider include wills, trusts, and powers of attorney for property and health care.
A properly constructed estate plan, which includes the titling of your assets in alignment with that plan (i.e. “funding your trusts”) can help ensure that your assets are distributed according to your exact wishes. Having such a plan will clearly define your wishes, which can help to minimize the chance of disputes and infighting among your surviving family members.
Going through this process can also allow for the protection of your family’s future financial security, as well as to enable your estate to eventually be settled in a private manner by avoiding the lengthy and expensive probate court process.
Your properly constructed estate plan will also allow you to address such important issues as dictating a guardian for minor children, outlining your medical and financial preferences if you become incapacitated, and, depending on the entities that are included in your plan, could also help to reduce the future burden of estate and inheritance taxes.
- Do you know where your important financial documents are?
Make sure to retain your important documents in a secure location and ensure that you and your loved one(s) can access that information in case of emergency.
- Have you shared with someone you trust key information, passwords, etc.?
Make sure that a trusted family member or fiduciary knows how to access your important financial-related information through a list of various passwords. This is crucial not only after your death, but also if you become incapacitated while still living.
Whether you save these passwords and access credentials in a password manager or maintain a simple handwritten list, failing to provide this information could prevent access to valuable information or property stored on your smartphone, computer, online accounts, or in the cloud (Fidelity).
It is also important to assemble a comprehensive list of all your assets as well as instructions regarding how to access your various online accounts and the hardware where you hold digital assets.
Providing specific directions to your executor on what should happen to your assets after your death, including your digital assets, is also helpful. For example, should a social media and/or email account be closed, a service and/or subscription be discontinued, etc. (“Estate Planning for Digital Assets”; www.ccpwealth.com; September, 2025).
Asking yourself these 11 questions will enable you to address some important planning issues within your overall financial plan and possibly make necessary adjustments in advance of entering the retirement stage.
These questions and the issues they raise are among the many planning-related areas that our Advanced Planning and Advisory Teams at Clearwater Capital Partners address through the financial planning process, along with the customized income modeling that we deliver for our clients’ situations.
Typically, this comprehensive financial planning discussion will also include the expertise of other trusted advisors, such as estate planning attorneys and accountants, with the goal of meeting a specific client planning need.
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