Suze Orman: 3 Life Areas Worth Reviewing With a Financial Advisor Before You Retire
Written by
Laura Bogart
Edited by
Kristen Mae
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To retire, or not to retire? That’s not so much the question, because every American wants to sail off into the golden rays of their golden years, enjoying time away from the workforce. The real question is, “When can I retire?” While there are certain benchmarks of eligibility — like being the right age for Social Security or cashing out a retirement account without penalty — there are other factors at play that influence when you can truly retire.
Unsurprisingly, answering this question is a big part of author and financial expert Suze Orman’s work. Orman spends a lot of time considering what makes a healthy, sustainable, and enjoyable retirement for her followers. She emphasizes that a good financial advisor will ask about three key areas of your life — areas you should be prepared to review carefully before making the leap into retirement.
How Is Your Health?
It’s not just a polite question. It’s actually one of the first things you should ask yourself as you think about retirement. While it’s impossible to predict the future, if you’re in relatively good health right now, with a family history of longevity, you can anticipate that your golden years might be long ones indeed. And that means you can expect to be paying for everyday life expenses and health care needs for quite a while.
On the flip side, if you anticipate some health struggles in the future, you know your retirement budget will need to be heavily weighted toward health care, with the understanding that you might need to look into long-term care options. Orman recommends spending time becoming an expert on all things Medicare and reviewing various health care policies and long-term care options before retirement.
What Do You Want Your Legacy To Be?
Naturally, you want to imagine your retirement as a time of great enjoyment — the years you finally get to do everything you always wanted to do, but couldn’t (at least, as often as you’d like) while you were working. You probably don’t want to consider not being in a place to make your own decisions, or how you want to be remembered when you’re not around, period.
Still, these are crucial areas to plan for as you approach retirement. So you should absolutely factor estate planning into your conversations with your financial advisor. In her book, “The Ultimate Retirement Guide for 50+,” Orman wrote: “How well you set up your family to navigate your later life will also be a part of your legacy.”
Orman recommends having all your documents in place, including a financial power of attorney, as well as a health care power of attorney. You should also be as clear as possible with these representatives about your desires, ensuring there’s no guesswork in a time of potential crisis.
Your will is also how your wishes for your long-term legacy will be preserved. If you want to donate to particular charities or causes after you’re gone, make sure that is clearly stated.
Your Finances
This one is a no-brainer — of course you need to make sure your finances are in order before you retire. But what exactly does that mean?
Orman once answered this question directly for a reader who wanted to know when he and his wife could retire. “For you, right now, retirement might mean a period of 30 to 35 years or longer. So the following question has to be asked and answered: How long will your retirement income last? Will it last for 35 years — or for 45 or 50 years if you’re one of the growing number of people who live into their 100s?”
She encouraged the reader to ask himself if he and his wife could survive on their pension incomes, as well as Social Security benefits, and the “conservatively estimated interest income that can be taken from your investments.” In addition, she said that the couple should absolutely look into their tax-deferred accounts as well.
“So this is how to figure out whether and when to retire. Calculate your true living expenses today and what you project into the future,” she said.
Planning for retirement requires more than just a financial nest egg; it’s about envisioning the life you want and preparing for both the expected and the unknown. Whether it’s safeguarding your health, defining your legacy, or ensuring your finances can go the distance, taking the time to reflect on these critical areas — and working with a knowledgeable advisor — can set you on the path to a retirement that’s as secure as it is fulfilling.
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