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The Most Important Retirement Questions You Need to Be Asking Yourself

SmartAsset - copyright 2018

Matt Wiley | FEB 1, 2019

As each year passes and you inch closer to retirement, there are serious questions you need to be asking yourself to make sure you're ready when the time comes to officially exit the workforce.

1. Is my regular savings account earning interest?

If you have liquid assets sitting in a regular savings account, there's a good chance it's earning next to no interest. The average savings account interest rate is 0.06%, according to FDIC. However, you can find savings accounts with much higher rates.

This CIT Bank Savings Builder Account offers 2.45% interest as long as you deposit at least $100/month or maintain a $25,000 balance. If you have $250,000 in a high-interest account and save over 20 years, you’d earn $140,127 in interest.

2. Do I have a formalized retirement plan?

If you haven't spoken with a financial advisor to formalize a retirement plan, the time is now. The earlier you put a plan in place and start working toward it, the better. Financial advisors can provide expertise on how best to allocate your assets, make smart investments and maximize your retirement account contributions.

3. Is my 401(k) in good shape?

When is the last time you assessed your 401(k)? Do you know how your money is invested or your risk tolerance? If not, you need to take a deep dive into your account and determine where it stands. Will it get you to your retirement goals in its current state, or do you need to rebalance? A financial advisor can assist you in this.

4. When will I elect my Social Security benefits? 

Benefits at age 62, 66 or 67 are not your maximum benefits. The maximum Social Security retirement benefit kicks in at age 70.

Each year after full retirement, your payout increases by a certain percentage based on specific criteria. To maximize on this strategy, we recommend holding off until you are 70 — payments will be the highest possible, increasing by 8% each year you wait. 

5. What order will I withdraw from my retirement accounts?

The order in which you withdraw from your accounts is extremely important -- it could let your tax-advantaged accounts grow to their full potential, make your savings last and even save you money on taxes. 

Determining the optimal sequence to withdraw money from your retirement accounts is different for everyone, so we recommend speaking with a financial advisor.

While the value of working with a financial advisor varies by person and advisors are legally prohibited from promising returns, research suggests average additional investment returns can range from 1.5% to 4% each year. 

Chances are, there are several highly qualified financial advisors in your town. However, it can be daunting to choose one. 

This new tool makes it easy to find the right financial advisor for you. Now you can get matched with up to three local fiduciary advisors that have passed a rigorous screening process.

1. Simply enter your ZIP code below.

2. After you enter your ZIP code and answer a few questions about your financial goals, you can compare up to three top advisors local to you and decide who to work with.

3. Enjoy a better financial future!

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