5 questions to ask your financial advisor about retirement

Information courtesy of USAA Life Insurance Company and USAA Life Insurance Company of New York

Wouldn't it be nice if there was a simple, one-size-fits-all solution to retirement planning? Unfortunately, retirement planning isn't that easy.

It's hard to make a plan that both meets your immediate needs and makes your retirement savings last. Plus, everyone has different retirement goals. Some people want to relax after decades of hard work. Others want to stay busy with volunteering, hobbies, traveling or part-time work. Others might need to care for family members.

That's why working with a trustworthy financial advisor to build a custom plan can make a big difference. But where should you start? We recommend asking your advisor these five questions to kick off a strong working relationship that'll pay off in the years to come.

Question 1: Where will my retirement income come from?

The question sounds easy enough to answer, but sometimes it's not. It can be tricky to create a consistent paycheck that'll last throughout your retirement.

Retirement income usually comes from one or more of these sources:

• Retirement accounts or pensions
• Social Security benefits
• Part-time work
• Passive income from investments
• Guaranteed^{See note1} income from annuities

When and how much you withdraw from each will be a major part of your retirement plan. Talk with your advisor and make sure you have a plan that fits your needs.

Question 2: What's my plan for Social Security?

Social Security is still one of the most reliable sources of retirement income. It provides income for you and your survivors that's adjusted to your cost of living. Depending on your situation, Social Security benefits may make up all or just a small part of your retirement income.

There's no right answer for when to claim Social Security benefits. That's why it's important that your advisor knows your goals so they can make the best recommendation.

Question 3: How should I prepare for health and long-term care costs?

Many people think planning for healthcare in retirement is just enrolling in Medicare Part A and paying some Part B premiums. But there's more to think about. Even a healthy 65-year-old couple has a 70% chance that at least one of them will require significant long-term care.

Whether you're in assisted living or paying for home healthcare, the costs can add up. And Medicare or other medical insurance often won't cover the bill. Having a good long-term care plan may save you and your family headaches down the road.

Question 4: How should I invest?

That depends on your risk tolerance and, more importantly, your risk capacity. You may be OK with taking risks but find it hard to recover from a market drop.

A good advisor will take a full look at your assets and give you honest advice on how to invest wisely.

Question 5: How should I manage inflation?

Inflation affects each of us differently. Retirees living in their own homes may experience rising utility and food costs, while those living in a retirement community may have to deal with their rent going up.

It's important that your retirement plan includes a cushion to help you manage inflation. Make sure your advisor is aware of your situation so they can give you the best advice on how to combat inflation.

Retirement planning is an ongoing process.

Even when you have a retirement income plan, it may not be final. Some factors that can affect your planning are:

• Personal or family health changes.
• Inflation, market or interest rate changes.
• Tax and legislative changes.
• Divorce or the death of a spouse.

You and your advisor can always revisit your plan as your retirement goals and financial needs change.