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Ask Yourself These Three Questions When Creating Your Retirement Plan

Guidelines to Sharpen Your Vision of What Retirement Means to You
| By: Randall E. White, CFP®, RICP®, CRPC®, CMFC®

Ask Yourself These Three Questions When Creating Your Retirement Plan
Wednesday, 23 March 2022

It’s no secret that the key to a successful and fulfilling retirement is a well-planned, comprehensive retirement plan. While creating your retirement plan, there are three big questions that you must ask yourself in order to clarify your vision for this phase of your life and determine what you need to plan for. After all, a retirement plan can only work if you know what you want and need! So, ask yourself the three questions below and then you can use this newfound clarity to develop an intentional plan for your future.

Question #1: Why Are You Saving for Retirement?

While this question may seem arbitrary or obvious, try to push yourself to really think about why you, personally, are saving for retirement. What is it that’s motivating you, specifically? Do you want to feel financially secure? Do you want to be able to have enough money saved that you can travel the world once you retire? Are you hoping that you can live strictly off interest and leave your savings to your family?

Whatever your motivations, there’s no right or wrong answer to this question. What’s important is that you get to learn what’s driving you as you plan for retirement so that you can gain more confidence in creating a plan that lets you enjoy your golden years the way that you envision.

Here is an example of why knowing your motivations can be helpful as you plan out your finances:

Say you and your financial advisor run an income analysis and find that you can spend $2,000 more per month than what you’re likely to need for necessary living expenses. Having a solid idea of what is driving your financial planning will allow you to easily determine what you want to do with that extra money. Whether you decide to save it for a rainy day, spend it on a vocation, or invest it in a trust for your grandchildren, you’ll be better informed to make a decision that falls in line with your ideal retirement lifestyle.


SEE ALSO: Five Financial Habits for a Comfortable Retirement


Question #2: Are You Concerned About Long-Term Care Costs?

Long-term care costs are high, and they’re only getting higher as time goes on. Since about 70% of retirees will need some form of long-term care, it’s important that you spend some time thinking about how that might factor into your retirement plans.

There are three main camps that retirees fall into when it comes to long-term care planning:

  • Those who plan ahead to factor long-term care insurance into their retirement plan.
  • Those who aren’t worried about it because they plan on using a Medicaid facility if need be.
  • Those who want a standard of care greater than what a government-funded facility offers are willing to spend their nest egg on it.

There’s no right or wrong way to think about and plan for long-term care, as it’s an incredibly personal decision. What’s important, however, is that you determine where your attitudes towards long-term care lie and how that may impact your retirement plans.

For instance, if we use the example discussed above, how would someone who falls into the first camp use their extra $2,000 each month? They would probably put it away to go toward potential long-term care later in life. No matter how you answer this question, it’s critical that you know your own feelings about long-term care so that you and your financial advisor can determine what the best savings strategy is for you moving forward.

Question #3: How Much Money Do You Want to Gift Your Heirs?

Simply determining how much money you’ll need to support yourself in retirement is only part of the larger puzzle that is retirement planning. You’ll also want to determine how much of your savings and assets, if any, you want to leave behind as a legacy for your children, grandchildren, or even a charity that you’re passionate about.

For some, supporting themselves for their entire retirement is the main priority rather than worrying about leaving any money behind - and that’s okay. For others, however, it’s important to leave something behind for future generations. Again, there’s no right or wrong answer to this question, but you need to know your personal answer to it. 


SEE ALSO: Four Steps to Feel More Confident About Your Retirement Plan


If you do want to leave money behind, you’ll need to get strategic about how you can best go about doing that. You’ll want to consider your gifting strategy and whether you’ll need to buy additional health insurance or perhaps look into a Roth conversion strategy. It ultimately will depend on how much money you have and what exactly you want to accomplish.

Another thing to keep in mind as you plan your legacy is how much money your heirs will be forced to pay in taxes on the assets you leave them. If you’ve never thought of estate planning that way before, think about how you would feel if you knew that roughly 50% of your estate could go to the government in taxes after you passed. If that makes you upset, what can you do differently now to change that outcome before you pass?

Concluding Thoughts on Knowing Your Vision and Creating Your Retirement Plan

Every retirement is unique, and everyone has their own vision of what this phase of life ideally looks like. And that’s a good thing! What’s important is that you spend time with yourself, determining what it is that you value and how you want to prioritize your money in retirement. This will allow you to develop a retirement plan that will bring you closer to achieving that ideal retirement rather than brining you further away from it.

At TriCapital Wealth Management, we believe that having a comprehensive retirement plan is crucial, and that the only way to get the most out of your retirement plan is to have a clear picture of what you want your retirement to look like. If you’d like to talk with us about creating a plan that is aligned with your overall vision for retirement, schedule a consultation with us today.

At TriCapital Wealth Management, we are committed to providing unique and dynamic financial planning that meets each of our clients where they are. If you’d like to speak with one of our professionals about your spending strategy or other retirement topics, please contact us today.  


Securities offered through Triad Advisors, LLC, member FINRA/SPIC. Advisory services offered through TriCapital Wealth Management, Inc. TriCapital Wealth Management, Inc. is not affiliated with Triad Advisors, LLC.

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