Most look forward to retirement. However, stopping the daily grind of work doesn’t always turn out as one expects. Most financial professionals focus solely on the financial preparation required to retire. There’s much more than savings and income that should be considered before deciding to retire.

Robert Intelisano, a New York financial advisor and insurance professional, gives us five questions that should be addressed before making what is one of the biggest financial decisions in one’s life.

These are the questions pre-retirees should be asking themselves:

1. Am I Ready Psychologically to Retire? Newly retired individuals can begin with feelings of excitement and anticipation only to fall into a morass of depression, anxiety, and restlessness!  When people retire, they can lose their identity.  It is important to develop a new identity as a retiree.  People spend more time planning a vacation than their own retirement!
2. Am I Financially Ready to Retire? The first step here is to “huddle-up” with your advisors and create an anticipated post-employment budget.  The good news here is that work-related expenses such as transportation and dry cleaning should be lower.  Another advantage might be your millennial children (statistics show 50% of millennials are still living with their parents) moving out.  Cash flow could determine if a part-time job is needed.
3. When Should I Take Social Security? This question has to do with your current age and the decision to take a reduced benefit now, versus waiting for the full benefit.  As a great mentor of mine used to say, “The Situation is the Boss!”  The ratio of retirees to workers continues to grow as America ages.  There are 10,000 baby boomers (born between 1946-and 1964) who turn 65 every day.  Uncle Sam has “moved the goal-posts” over the years with younger retirees seeing a graduated reduction based on age.  Some people look at how much money they will need for their lifetime.  The biggest fear of seniors is “The Fear of Running Out of Money!”  This is what makes annuities and life insurance such powerful financial tools.  Those that are in poorer health should consider starting sooner, rather than risking dying before collecting their full benefits.
4. What Do I Do About RMDs (Required Minimum Distributions)? Did you know that failing to take Required Minimum Distributions from your 401Ks and IRAs (Individual Retirement Accounts) can result in penalties of up to 50%?  Many people are not aware that The Trump Administrations’ “SECURE ACT” changed these rules in 2019.  For decades, retirees had to begin taking distributions or payouts from these accounts at the age of 70 ½.  Now, because of longer life expectancy (and other factors), that rule has been pushed back to age 72.  Some younger retirees should consider looking at a reverse mortgage and waiting on social security and RMD distributions.  The “SECURE ACT” bad news is that the “Stretch” or “Inherited IRA” has been eliminated, so retirees that planned on passing their IRAs down to multi-generations of their family can no longer do so.  This is another reason to start withdrawing money and enjoying your “Golden Years” now!
5. What About Medicare And The Dizzying Supplement Options? Fewer workers are retiring with health insurance benefits.  The biggest benefit (that I can think of) about turning 65 is being able to enroll in Medicare and saving BIG$$$$ on your health insurance by purchasing “Medicare Supplements,” which is a version of subsidized health insurance.  It is not uncommon for a single individual to save between $400-$500/month by enrolling into Medicare Part A, buying Medicare Part B (Prescriptions), and then enrolling into a “Medicare Supplement” policy, some of which are FREE!  These “Medicare Supplement” policy decisions should be made 60 days BEFORE your 65^th birthday!