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By Joe O'Boyle
October 20, 2016

A successful retirement, in my experience, requires a holistic plan to address both your financial and lifestyle needs. In my experience working with clients, I’ve come up with four important questions to ask yourself to make sure your plans for retirement are as good as they can be.

1. Are you thinking about the big picture?

I encourage my clients to determine what’s truly most important to them. For example, where will you live and what will you do with your time in retirement?

If you know you want to live close to your family and friends, that desire can guide your decisions. Will you need to relocate? Should you downsize your home? Should you rent? Travelling the world might be your primary goal. Or maybe you want to live in different locales throughout the year. I have a client who prefers to live nine months a year abroad because it is more cost effective for him, and the weather is better. He prefers, however, to be home for a month in the spring, summer, and over the holidays to spend time with his grandkids. Once you’ve figured out how and where you want to spend your retirement years, you can begin to map out a plan that strategically works toward making it happen.

2. Can you afford your dream retirement?

The thought of giving up a steady monthly paycheck after you stop working and learning to live off a fixed income – made up of Social Security benefits and your retirement assets – can be a difficult transition.

After establishing your big picture, one of the next steps is to structure a well-thought-out income strategy to achieve your goals. You’ll want to determine when you can retire and the type of lifestyle you might be able to reasonably enjoy. Develop a list of your financial necessities as well as your goals and aspirations. Your necessities will include day-to-day living expenses, such as housing, utilities, food, and health care. Your goals and aspirations may include fun expenses like travel, family vacations, hobbies, or a second home. Your aspirations may also include your wish to make donations or leave a legacy for your family. By allocating your expenses across these categories, you’ll have a better framework for managing your cash flow and understanding how much you will need to live comfortably in your retirement years.

3. What will health care cost you?

A Voya survey found more than 40% of Americans identified health care costs as their biggest worry in retirement. Many pre-retirees might assume that Medicare can support their future health needs, but that’s not necessarily the case. Having a plan that addresses the rising cost of health care often requires saving diligently during your working years. One strategy that has been successful for my clients who don’t currently have high out-of-pocket medical costs is taking advantage of their maximum Health Savings Account contributions each year. This approach involves earmarking specific savings toward anticipated future medical costs. In 2016, individuals may contribute up to $3,350 to a HSA, and families up to $6,750. An additional $1,000 in “catch up” contributions is also available to people 55 and older. The benefit is that HSA contributions are made pre-tax and grow tax-deferred, while distributions for qualified medical expenses are taken tax-free. Consequently, this tax benefit can often make an HSA a useful tool for savers looking to hedge against medical costs in their retirement.

4. Will you be ready when the time comes?

Emotional and psychological factors can also determine your retirement readiness. For many of my clients, their career is a defining part of who they are. They have to think about whether they will be able to walk away from this part of their identity. Having a sense of purpose and staying meaningfully productive are key considerations for many retirees. Enjoying ample free time while pursuing passions and hobbies might work wonderfully for some. Others, however, might want to launch an encore career or take a phased approach.

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As you answer these questions and think about your own journey to retirement, I encourage you to take a holistic approach. This includes creating a written financial plan and working with a trusted financial professional to help you reach your goals. But, remember, the important part of this journey is to simply get started.


Joe O’Boyle is a financial adviser and retirement coach with Voya Financial Advisors. Based in Beverly Hills, California, O’Boyle provides personalized, full-service financial and retirement planning to individuals and corporate clients. O’Boyle focuses on the entertainment, legal and medical industries, with a particular interest in educating Gen Xers and millennials about the benefits of early retirement planning.

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