Unasked Questions
RETIREMENT BRINGS with it a host of questions. The No. 1 question: Do we have enough for a financially comfortable retirement?
It’s an issue that’s no longer relevant to me, but it’s certainly relevant to my wife Elaine and to almost all HumbleDollar readers. But that fundamental question is just the beginning.
There’s a host of other retirement questions we ought to ask ourselves—about whether we have the right investment mix, how we’ll spend our time, whether we’ll opt for traditional Medicare or Medicare Advantage, who will be our social network, whether we’ll work part-time in retirement, when we’ll claim Social Security, whether to buy long-term-care insurance, where we’ll live and more. These sorts of questions are frequently grist for HumbleDollar articles.
But what about the questions we aren’t asking? Here are seven crucial questions that I don’t think get nearly enough attention.
1. When will our life be downsized? Eventually, somebody—either us or our heirs—will have to deal with our stuff. Who will it be? As many HumbleDollar commenters have made clear, it’s best to downsize before diminishing mobility forces us to do so. It isn’t just because the packing and moving will take a physical toll. Also, sorting through the clutter in the basement can take many months—time we may not have if we procrastinate for too long.
2. Are we putting off estate planning, wrongly assuming we’ll be capable of handling it later? It’s a story I’ve heard too often in recent years: Retirees put off organizing their financial affairs, assuming they’ll know when it’s time to act. But that moment of clarity may quietly pass us by, as our mental faculties slip away, and we could end up bequeathing a huge mess to our family.
3. What will happen to our taxes when the first spouse dies? You might have seen mention of the widow’s tax. It could, of course, turn out to be the widower’s tax. But either way, the spouse left behind often ends up paying significantly more in income taxes because he or she now has to file as a single individual, rather than as married filing jointly.
4. How will the surviving spouse cope with one Social Security benefit gone? Upon the first spouse’s death, the benefits received will drop by a third and perhaps more. How come? If one member of the couple was receiving spousal benefits—a maximum 50% of the other spouse’s full retirement age benefit—that spousal benefit will disappear, leaving only the main breadwinner’s benefit.
If the disappearing benefit was larger than the spousal benefit, the hit would be even larger. Will the Social Security check that remains, plus other retirement income, be enough to cover the household’s expenses, which likely won’t fall much after the first spouse’s death?
5. What if we can’t drive? This is less dire than it once was, thanks to home delivery by grocery stores, restaurants, Amazon and countless others, along with ride-sharing apps like Uber and Lyft. Still, if you live in a rural or suburban area, being unable to drive can make going to the doctor and dentist awfully difficult, and your social life could wither away.
6. Are the kids on board with providing care—or are we just assuming they are? This, alas, seems to be a topic that many families simply don’t discuss until a crisis is upon them. That doesn’t matter if you intend to pay for visiting nurses or head to a continuing care retirement community, and you have the financial wherewithal to do so. But if you assume your adult children will help with your care, you should make sure that is indeed a good assumption.
7. What other dubious assumptions are we making? I see folks make all kinds of questionable retirement assumptions—that stocks will notch double-digit returns, that their spending will fall later in retirement, that they’re unlikely to live beyond their mid-80s, that they know exactly what will make for a happy retirement.
I wouldn’t be so confident. If you’re age 60, think back to what you were like at age 30 and what you wanted out of life. That was 30 years ago. Now, imagine it’s 30 years from now and you’re age 90. Are you really sure you know what lies ahead and what you'll want years from now?
Jonathan Clements is the founder and editor of HumbleDollar. Follow him on X @ClementsMoney and on Facebook, and check out his earlier articles.The post Unasked Questions appeared first on HumbleDollar.
