Ask a Pro: Top 3 Things To Consider When Planning Your Retirement

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Retirement planning is often framed as a savings goal you hit and call it done. But retirement planning professionals say the bigger risks show up after you stop working.

We asked two retirement pros to name the three priorities they believe matter most and why getting them wrong can unravel even a well-funded plan.

Greg Reese: Income, Longevity and Taxes

Greg Reese, CEO and estate planning expert at AmeriEstate, said retirement planning should revolve around three goals: generating dependable income, preparing for longevity and handling taxes before retirement starts

1. Generate Dependable Income Before You Rely On It

The foundation of retirement relies on structuring income properly from the start. Reese said that people in their 50s often pay too much attention to saving and not enough to “withdrawal strategy, housing cost and tax timing.” Pre-retirees should designate guaranteed income sources, such as Social Security, pensions or annuity income, toward essential expenses “and cover discretionary expenses with investment withdrawals.”

Solely relying on investment withdrawals for basic living costs can create unnecessary stress during downturns.

He emphasized that “stress testing a plan against downturns helps assess whether cash flow remains sustainable through adverse periods in the market.”

2. Prepare For Longevity and Healthcare Costs

Retirement readiness requires planning for healthcare costs. He called it a “red flag” if someone doesn’t have a clear plan on how they will fund their healthcare costs and should definitely not rely on the market to stay strong to do that.

However, he also suggested seeing retirement as a transition or a “staged process” to allow for better coordination of income and expenses with long-term estate planning.

3. Handle Taxes Before Retirement Starts

Tax strategy becomes increasingly important as retirement nears, Reese stressed. He said, “There are strategies that can bolster long-term cash flow, such as evaluating Roth conversions, limiting capital gains and coordinating withdrawal order.”

Waiting until required minimum distributions (RMDs) begin limits flexibility. Planning earlier can help smooth income, manage brackets and preserve more long-term cash flow.

Evan H. Farr: Long-Term Care, Tax Structure and Legal Control

Evan H. Farr, a certified elder law attorney and retirement planner at Farr Law Firm, P.C., ranked his retirement priorities in a different order.

“First, long-term care risk; second, tax structure; and lastly, legal control,” Farr said.

1. Plan For Long-Term Care Before You Need It

Farr prioritized long-term care and called retirement planning that ignores long-term care as “simply gambling,” he said.

He explained that the greatest uninsured financial threat in retirement is not the stock market or inflation but “the cost of needing assistance with performing everyday tasks over an extended number of years.”

Medicare does not cover non-skilled long-term care provided at home or in a facility, he warned. “By the time you actually need long-term care, most of your good planning options are likely to be gone.”

Planning ahead may include evaluating traditional long-term care insurance versus hybrid policies and determining whether a Medicaid Asset Protection Trust is advisable. Waiting for a medical crisis, he said, turns proactive planning into “reactive damage control.”

2. Design Your Retirement To Maximize Tax Efficiency

Farr cautioned that building large tax-deferred accounts is not automatically the best tax strategy.

“If you retire with no assets other than tax-deferred money, then you have essentially created a future tax liability rather than a viable retirement strategy,” he said.

He noted that high RMDs can increase Medicare Part B and D premiums through IRMAA, reduce flexibility to fund long-term care needs and limit Roth conversion opportunities once Social Security and RMDs begin.

Opting for strategic Roth conversions before age 72, he said, can “decrease overall lifetime tax drag and increase flexibility to respond to long-term care events.”

3. Protect Control — Not Just Assets

Farr emphasized the importance of maintaining control if you become incapacitated in retirement. To do that, retirees need durable financial powers of attorney, current healthcare directives, correctly titled assets, proper beneficiary designations and an asset structure aligned with long-term care objectives.

Also, he warned of a common misconception — placing assets in a revocable living trust does not shield them from long-term care expenses.

Structure Matters Most

Together, both experts lay bare the fact that retirement planning is less about hitting a savings figure and more about structuring dependable income and planning for all kinds of eventualities.

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