5 Crucial Retirement Questions to Ask Before You’re Ready to Retire

It's never too early to start thinking about your retirement plan. Ask yourself or a financial advisor these five retirement questions to stay prepared.

Do you know how much you really need for retirement? There are many different formulas and calculations to determine this amount, such as multiplying your salary in your first year of work by 25, assuming you need at least $1 million to retire, or simple target date calculators that consider how much you currently have saved, your age, and the age at which you want to retire. Choosing a retirement account can also be tricky, but using an IRA calculator can help you make an informed decision.

However you determine what amount you need, there are some other things that you need to consider, especially if you want to do things differently post-retirement. Read on for some retirement questions you should ask yourself to make sure you are prepared.

1. At What Age Do I Want to Retire? 

This probably one of the most important questions, as it will be a large factor in determining how much you need to save. If you are going to work until you are 62 or 65, you’ll need much less to live on than if you want to retire early, say in your 50s. The longer you work, the more money you are saving towards retirement and the more you are contributing to Social Security. 

This isn’t to say it’s better to wait until your 60s, but rather, you should think about when you want to retire earlier rather than later so you can start planning for it. 

2. What Do I Want to Do When I Retire? 

Are you going to spend your retirement years traveling? Or engaging in some other hobby? Or are you content to spend your days at home, gardening, relaxing, and seeing your family? 

Will you work part-time to stay busy? Do you want to pursue passions that you may not have had time for while you were working? Think hard about all these questions, as they will dictate how much income you need once you retire.  

3. What Income Will I Have? 

Add up all the different sources of your retirement income to determine if you’ll have enough when you’re ready to retire. You may have a pension, investment accounts such as IRAs, 401(k)s or 403(b)s, and you may wich to take Social Security. 

Figure out how much you’ll have coming in from each of these sources to determine if it is enough. Check out the Freedom Insurance website to learn more about saving for retirement. 

4. Where Will I Live? 

If you plan to live in your current home, will it be paid off by the time you retire? If not, or if you plan to take out a home equity loan, cash out refinance, or other loan taken against your home, how much will you owe after you retire? 

If you want to sell you home and downsize to a home in somewhere like this 55+ community in Chester County PA, consider how much that will cost you. If you plan to move to an area with a considerably higher or lower cost of living, that will factor into this. 

Maybe you plan to move in with your children post-retirement. This will make a difference as well, as your living costs may be less, giving you more discretionary income. 

5. Will I Have Health Insurance? 

Most people are eligible for Medicare at age 65. You’ll have to apply for it, though, when you turn 65 and you may need a supplemental plan, as Medicare may not be sufficient for all of your medical needs. If you want to retire before age 65, you’ll need health insurance either through your employer, a spouse or partner, or purchased privately. 

This can add a significant amount to your monthly expenses. 

Ask Yourself These Retirement Questions Before You Decide to Retire

The ideal situation is when you can ask yourself these retirement questions long before you are ready to retire to ensure that you actually have enough money to meet your basic needs and also give you the ability to do the things you want to do in retirement.

If you found this article and these questions helpful, be sure to check out some of our other finance articles before you go.