4 Non-Investment Questions to Ask an Advisor Before Retirement | personal financing

Kate Ashford, CSA®

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Using a financial advisor for your investment needs is 100% on brand, but what about the other parts of your retirement life? For example, a third of people age 64 and older have a financial advisor, but only 2% have asked their advisor for help with their medical care options, according to July 2022 Report From healthcare consulting firm Sage Growth Partners.

But Medicare and other non-portfolio issues — like travel and long-term care — can affect your finances.

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“We actively bring these insights to our clients, but there are still a lot of advisors not out there,” says Crystal Cox, a certified financial planner in Madison, Wisconsin. “They still focus only on investments and the portfolio.”

Here are some questions to ask at your next meeting.

1. What retirement decisions should I consider?

Your life in retirement may not continue as it was in the past. Are you planning to travel? Do you intend to move to a different country or downsize? How often do you want to buy a new car?

“Most people think, ‘I need a certain amount of money to live on,'” says Daniel Lash, an essential financial center expert in Vienna, Virginia. ‘What about all the ancillary things that come with life?’ All the things you want to do? “

Planning your retirement plans can help you and your advisor decide when and how you’ll need the cash.

“Do you have an idea of ​​where you’re going, and what the real estate looks like in this public realm?” Lash says. “They thought about retirement, not ‘What am I going to do when I retire? “

2. What do I need to know about Medicare?

Although you generally can’t. Sign up for Medicare Until your age approaches 65, your income in previous years will affect what you pay for coverage. Each year, Medicare Part B and Medicare Part D are their installments on reported adjusted adjusted gross income from the previous two years. So if you make more than $91,000 individually, or you make more than $182,000 jointly, you’ll pay extra each month.

“Because there is a dip in Medicare expense earnings, we’ll adjust plans accordingly, because they may pay out much more in the first two years of retirement than in late retirement,” Lash says.

It’s also wise to consider the guidelines for Medicare options in general, because sometimes you can’t change coverage later if your health situation changes — and Medicare is complicated. “We have an annual meeting with someone who is a healthcare professional,” Lash says. “All customers are welcome to attend.”

3. Can I afford to self-insure for long-term care?

A 65-year-old now has a 70% chance of needing some kind of long-term care, and the costs are exorbitant: It’s $54,000 a year for an assisted living facility and about $95,000 for a shared room in a nursing home, according to insurance company Genworth’s 2021 care cost survey.

“Some people are in good enough shape that they feel comfortable self-insuring,” says Kevin Brady, a CFP in New York City. Others have more limited assets.

Regardless of the case, it is essential to discuss the potential costs and whether you have the savings needed to manage them. If you don’t, you’ll need to run the numbers on products like long-term care insurance or a hybrid policy that combines permanent life insurance with a long-term care rider.

“We always work with an expert to make predictions and see what makes sense,” Brady says.

4. Do I have enough money to have some fun?

Successful retirement isn’t always about tangibles. For many, it’s time to realize travel dreams and other experiences, but frugal spending can get in the way.

“Customers are often overly conservative for fear of running out of money, but in the process they are changing the retirement experience,” says Kevin Lum, CFP in Los Angeles. “By the time they realize their abundance, they are too old to spend it.”

Talk to your counselor about your big desires and whether you have enough money to spend a little before you settle for quieter spending.

Lom says actual retirement spending feels more like a smile than a straight line, with more spending initially on things like travel and eventually more spending on long-term care needs.

“I’m not saying that people should spend irrationally,” says Lum. “But thinking of retirement spending as a fixed account that doesn’t change throughout retirement is not a smart idea.”

This article was written by NerdWallet and originally published by the Associated Press.

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