We recently poured some concrete at my house. It’s not a major project that we’re working on at the moment, but any time you work with concrete, one must respect the time it takes to harden. So, of course, I immediately had a small chat with my kids about “staying off the concrete until it was ready.”

The precaution lasted all of about fifteen minutes–when the discovery of a bunny nest in our backyard overloaded their mental circuits, and they ran right across the fresh concrete to investigate. My blood pressure immediately rose, as I just knew that we now had footprints in the pristine slab that was only hours old. Luckily, everything was still intact.

I could easily tell that talking wasn’t going to be enough. We needed some form of protection. Therefore, we put up some furniture to act as guardrails, protecting the concrete and my sanity. 

Our goal is to have an outdoor area that we can use for all sorts of fun activities. We have room for games, and we have furniture surrounding a small fire pit. Soon, we hope to have a gazebo over a table so that we can even eat outside when the weather cooperates. 

I expect that our outdoor arrangements will change over time. Our kids will grow and have different interests and activities for the outside area. Furniture will no doubt need to be replaced. One thing that will remain, though, is our concrete foundation. 

This is how I like to view retirement income planning. We must build our plans on a solid foundation, yet we also need to consider how our desires and needs may change over time. A good retirement planning process can help address both income stability and potential unknowns. Here are some ideas to get you started:

What is Your Desired Retirement Lifestyle?

Any time I search online for retirement saving or investing content, the search engines often direct me to (what I consider) generic content. There is no shortage of information when it comes to retirement topics like saving, investing, medicare, and estate planning. Let’s step away from the rules of thumb and talk about You.

What do you really want? What kind of lifestyle do you want for you and your family during retirement? It’s perfectly ok to dream here. It’s also ok to be a little uncertain. 

For a moment, just consider this question:

If money were no object, how would you live your life during your retirement years? 

If you’ve had a moment or two to think about that, consider this question:

What kind of income would it take to fund that lifestyle? 

How Will You Fund Long Term Care?

Ooh—this one might be sticky for some of us. Thinking about aging and our mortality can be challenging. I get that. 

I also get that many retirees want to live life to the fullest; and to be transparent, I don’t know how you can build an optimal retirement plan without discussing long-term care. It’s simply too important to ignore.

From this article in 2019, the current estimate is that roughly 70% of Americans turning 65 will need some kind of long-term care. The majority of people want to receive care in their homes instead of a facility. How will you address this? 

Some financial advisors think that you must immediately consider purchasing long-term care insurance. Other planners may feel that people can adequately self-insure and provide for healthcare needs if you have a reasonable amount of financial assets. The only recommendation I can make is to have the conversation.

Planning for long-term care is an essential part of retirement planning. I advise you not to count on Medicare (it doesn’t cover extensive long-term care periods), and you definitely don’t want to face a Medicaid spend down situation. 

Talk with your spouse. If necessary, consider discussing your plan with your adult children. Ignoring this topic can completely derail your retirement income plan should you or your spouse unexpectedly need care.

A final question that I believe should be discussed but likely isn’t mentioned in initial retirement planning discussions…

What are Your Thoughts on Gifting to Your Adult Children? 

I know…I know. I’m getting a little outside the box with this question. First, let me assure you that most of my initial retirement consultations do not include any special considerations for adult children. That’s completely normal. 

In fact, I would say that, in my own experience, it’s pretty rare for pre-retiree and early retirees to consider providing financial gifts or assistance to their children. I do think it’s a topic that should be discussed for a couple of reasons. Please bear with me. 

  • You may not plan to give money to your adult children, but asking this question also allows you to briefly assess the financial well-being of your kids. Do you anticipate them needing financial help? Have they requested financial help in the past?
  • As retirees become grandparents, sometimes priorities shift (as they should). Now, gifting to adult children for the benefit of the grandkids may be a source of joy.
  • Let’s focus on the positive for a moment. If our retirement journey goes well and you have more than enough assets to fund your retirement lifestyle through life expectancy, would gifting money while living be something you’d like to consider incorporating into your financial plan?

I must admit that I didn’t always think this way as a financial planner. However, as I have grown and matured in the business, I realize that possibly my biggest role as a financial advisor is that of a guide. I need to ask questions and probe for insights that clients may not think to ask themselves. 

By no means would I offer these questions as a comprehensive list for retirement planning. I mean– I didn’t even bring up taxes! However, I like these questions because they require some thought, and they can be highly personal. Personal questions are good. Your retirement income may be quantified by a spreadsheet or software program–but it will be lived out and experienced by you. 

We often speak with younger investors about creating financial goals for themselves. Let’s not forget about life goals. Money may touch everything, but I believe you should be free to make financial choices that are best for you and your family– even if the “rational” economic models say otherwise.

Think back to my concrete example for a moment. We poured it to have a firm foundation for all of the activities we plan to have in the years ahead. While it was hardening, we created some guardrails with our furniture to protect it. This same philosophy should be considered when creating a retirement income plan— have a firm foundation, build some guardrails, and know that your plans may change as life changes.