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What Issues Should I Consider Before I Retire?

Updated: Nov 11, 2022

This checklist covers 32 of the most important planning issues to identify and consider for a client who is about to retire. It’s structured as follows:

  • Cash Flow Issues

  • Health Insurance Issues

  • Asset & Debt Issues

  • Tax Planning Issues

  • Long-Term Planning Issues

  • Other Issues


Hi, Todd Pouliot, Gateway Financial. Visit us at, and contact us if you need some help, I would love to hear from you. Going to get right into this checklist here. This checklist covers 32 of the most important planning issues to identify for a client who's about to retire, and we’re going to go through a lot of things here. We're going to cover a few main areas. We're going to talk about cash flow issues, health insurance issues, asset and debt issues, tax planning, which is one of my favorite ones, and long-term planning issues. We're going to dive right in after I say, hey don't forget that thumbs-up button, subscribe, and ring that bell and we appreciate you being here and being subscribers. As always, I'm going to share my screen with you. Here we are, cash flow issues. Will your cash flow needs change? If so, develop a new income and expense plan. As you retire, if you’re W-2 or 1099 or however you’ve been compensated, that will go away, and figure out a cash flow plan. I love some of the software that we have, we use some cash flow planning that goes year by year by year, and it says, ‘Hey here's when you're going to retire.’ You'll see that number drop, and then where are we going to withdraw those funds from? Will you receive a pension? Consider how you are going to take your pension; single, joint, or lump sum. Very good analysis sit down and do the analysis on what is the best option for your pension. Also, make sure that your company is going to be in business long enough to keep that pension going. Yes, there are some guarantees on some pensions, but we want to make sure that none of those guarantees change as we've seen in the past. You can talk to several people who have had their retirement plans changed after they were told that they’d have health insurance paid for or this was the amount they were going to receive for the rest of their life. Also, look at your Social Security and/or other sources of income because we want to make sure those are coordinated to be effective in your tax planning, which I'll speak about later on. Any other benefits from those employers that we might be forgetting about? We want to know that those are going to be taken care of. Are you retiring early? So, make sure you understand, FRA, full retirement age, and Social Security benefits that will be reduced if you collect prior to your full retirement age. We sometimes want to look at, how can we make this even go out to age 70, and whether can we get increased Social Security benefits on that planning. And again, that coordinates very very tightly with tax planning. Can you access your 401(k) penalty-free if you leave your employer the year you turn 55 or later? Be careful about how you do 401K withdrawals. One of the biggest challenges that I deal with is 401(k) exit strategies. You've done all the right things by contributing to your 401(k), but how does that affect the taxability on all that income – on your pension should you have one, and also the taxability of Social Security? When you retire, and when you take Social Security are very important timing matters, and how we can get that tax plan to work during that time is very important. Typically, we see that high line of income, we see a drop in income, which means a drop in tax rates. And, we want to utilize some of that timeframe there to do tax planning and possibly some Roth IRA conversions. Will your spouse receive a pension from an employer that did not withhold Social Security taxes? Consider windfall elimination provision or the GPO, government pension offset. So, WEP and GPO are two things that most people are unaware of, hopefully, you are, and if not we love to help educate you on what those are. Are you married? Consider additional Social Security claiming strategies. Spousal benefits can be extremely important at this time. Were you married previously and are you currently unmarried? Again, 10-year-rule if that may have ended in divorce. We have another flowchart, “Am I eligible for Social Security Benefits if I Have Been Divorced?” It’s a great flowchart and understanding the date and age ranges for those. So again, we also have another flowchart here, “Am I Eligible for Social Security As a Surviving Spouse?” flowchart. So, we want to make sure we understand those different flow charts as well. Health insurance. I will tell you, this was not a big area of study for me at one point, and I said I really don't really care about health insurance and how it fits into a financial plan, and as we have seen, that was a mistake and I loved learning about health insurance and learning from others about Medicare. So, you are not eligible for Medicare until age 65 unless you qualify for an exemption. And, if you are a health insurance marketplace enrollee, you may be eligible for the premium assistance tax credit. So, be aware of how important health insurance is here. Will you change your employer-sponsored health insurance upon turning 65? So, you may need to look at COBRA. COBRA can be a good answer in these instances. Additional insurance, such as vision or dental coverage, I love to talk about those things because people don't know or don't have a good understanding of how those insurances work, and we may need additional vision or dental. And also, what about hearing aids as you age? How do we get those covered? Are we paying for those out of cash? Are you contributing to an HSA? If you watch my videos you know this is one of my favorite topics, one of the best parts of the tax code. Consider HSA and Medicare coordination. So, we also have another flowchart we can work with you on that says, “Can I Make a Deductible Contribution to my HSA?” I love HSAs and I love talking about HSAs and their advantages of those. Will your modified adjusted gross income exceed $91,000 or $182,000? Don't forget about IRMAA. We talk about IRMAA and we need to know what those levels are and the surcharges. So, guess what, we have another flowchart we talk about, ‘Will I Avoid IRMAA Surcharges on Medicare Part B & D?” One of the issues I've seen is, I've had a new client come to me, their existing advisor did a very large Roth conversion for them, which I think was a good decision to do that, but it was so large that they didn't explain the impact that their IRMAA surcharges were going to affect their premiums for Medicare. It was an additional cost that the clients were not – didn’t have in their plan for their cash flow. So, those are some of the things you really want to look at and be very cautious of when you’re looking at this. Are you disabled? Certain benefits – and do you need life insurance or have those needs changed? Again we talk a lot about term life insurance during the working years because we want to replace that income. But now that you're retired, do we still have the same need? Or do we have a life-long need? Remember, when you're young and healthy it's always cheaper than when you're older and unhealthy to get those life insurance policies written for you. But is it a tax thing now that you need that life insurance for? Have those needs changed? A great conversation started here for long-term care. Are you concerned about that? Look at long-term care insurance or self-insurance strategies. Again, we have a checklist for you, “What Issues Should I Consider When Purchasing Long-Term Care Insurance?” And, one of the nice things that have happened over the years is life insurance now has some long-term care opportunities associated with it, so that might be a good strategy as we said, as the need for life insurance changes, but maybe the need for long-term care insurance is also changed. Concerned about funding? We want to make sure those are self-insured, long-term care policies, and possibly some life insurance care policies. And, if you do have long-term care insurance, does it need to be reviewed to ensure that it meets your needs? It’s one of the things I love is knowing people in my local area where I can ask them these questions like, “Hey what's going on in long-term care, and are the current policies our clients have – is that good for what they're looking to accomplish later in life?” Maybe it does not include home health care needs or having a home nurse that comes to see you and maybe it's only at a facility that the policy may cover. If that's not your wish, you know, maybe your wish is to stay at home as long as possible, that long-term care policy may not be the coverage that you need. Asset and debt issues. Hopefully, at this stage of life, we don't have a lot of debt. Maybe perhaps just a mortgage, but do you have stock option grants or restricted stock units? I love talking about these. If you've been watching my videos, we need to understand how retirement affects your rights to those stock options and the impact those will have on your tax liability and ultimately your cash flow planning needs as well. Will your risk or risk tolerance change our objectives change? I love the conversation I used to have with my father when he was working. Ultra-aggressive investor, who wanted every last dime out of the market he could get, and he said to me the day he retired I want to change my risk tolerance because I don't ever want to have to go back to work. So, understand risk tolerance, risk capacity, and your objectives for those investments. Some people keep the same investment tolerances and we need to talk about those. Each person is different. If you are a business owner, do you need an exit strategy or a succession plan? I can go on for an hour and a half about that, but we'll just leave that as a yes or no for today. If you have annuities or illiquid assets, do they need to be reviewed to understand the options? We've been spending all morning talking about annuities at the office with our team and some of the options or non-options some of these contract owners have with their illiquid assets. Do you have a loan or employer retirement plan? If so, you may need a plan for how to pay it back and be mindful before rolling the balance to another plan. Read the plan document. So, make sure you understand those employer retirement plans and any loans that are involved in those. Deferred compensation. I love deferred compensation. It’s great tax planning, but coordinate that strategy among your other sources of retirement income to optimize your cash flow and manage income taxation. Very important. I think people come to us and say, “I want to pay the lowest taxes every year.” That's not always the best strategy. It’s about paying the lowest taxes over your lifetime and using the tax code to your benefit – and really important there. Do you have multiple accounts with similar tax treatment? Multiple 401(k)s, multiple IRAs, and we talked about that this morning with clients that have stuff all over the place. How do we coordinate and consolidate those accounts to reduce complications? And, I often say reduce the chaos in your financial life. Will you change your residence? Tax liability and cash flow planning. Also, your Medicare Advantage plans if you move out of network, and also your state and local taxes may change. So, understand what that means. Work with us and a qualified CPA so you can have those conversations. So, now we're getting to my thing that I love to talk about, it’s tax planning and we have hit on that in a few things. Do you expect to have a large required minimum distribution or RMD? Consider strategies to reduce the RMD, such as Roth conversions. The RMD discussion in Washington D.C. has been happening. We moved now to age 72, there are discussions about 75. I'd rather make a plan of what the current rules are today than what may happen. Follow it, but always keep your ear open to find out what's going on in Washington. And, do you expect your income to be lower? Consider deferring any Roth conversions until you are in a lower tax bracket. Remember when I said people typically have this dive? Consider this flowchart, “Should I Consider Doing a Roth Conversion?” It’s a wonderful flow chart that we use a ton. Long-term planning. Do you expect your estate will exceed the federal gift tax exclusion amount? Look at strategies for a possible liability on that federal estate tax. Look at the strategies if you're going to have to have that much money. Now mind you, this number moves a lot and it can change radically, and quickly. Are you charitably inclined? I know my wife and I love working with the Cystic Fibrosis Foundation. We have another checklist for you to look at. “What Issues Should I Consider When Establishing My Charitable Giving Strategy?” It helps reduce your tax burden, and it also helps you to do good in the world. Qualified charitable distributions are another wonderful planning opportunity that we show with our software. Is your estate plan old or possibly outdated? One of the things I like about being a holistic planner is talking about financial planning yes, tax planning yes, but also estate planning. Make sure you look and consider this checklist and figure out what you need to have updated. And, do the account beneficiaries need to be reviewed and possibly updated? I love TOD accounts. TOD is one of the easiest estate planning strategies to do. Also, as I stated, life insurance is a great way to pay for estate taxes and to help settle estates and the retirement plans that are there. Also, do you have any unused vacation days? You may be eligible to use those prior to retiring for compensation don't let those go to waste, you've earned them. And, are there any state-specifics that you need to see about your own particular state? And, I hope you really enjoyed this checklist. It's a simplified checklist, we covered a lot of things rather rapidly, but it leads us to other areas of discussion as, “Hey, maybe this is something I need to look at – this is something I need to look at.” Just understand that all these questions are out there for you, that we are asking these questions, because it allows you the ability to pivot, and financial planning, good financial planning, will allow you to pivot later in life. So again, Todd Pouliot, Gateway Financial, We certainly appreciate you being here. Hope you have a wonderful day, and be well.

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