Making the decision to retire is anything but a cakewalk these days because the basic frequently asked questions (FAQs) about retirement are off the chart. Things like...
- Will my savings actually be enough?
- Which accounts should I draw from first?
- When should I start taking Social Security?
We don't have any genies or savants at Smart Senior Daily, but we do know some pretty smart financial planners who can help you plan better
And we think we've come up with a calculator – one based on some simplified assumptions – that you can use to give you a general idea of whether you can afford to retire or not (that's right after the experts' FAQs).
FAQs: Can You Afford to Retire?
Now that you've got an idea of what your next move should be, let's call in those who do this kind of planning for a living – and do it well.
SSD asked three financial consultants — Caroline McInerney, CFP®, founder of HWM Wealth; Evan H. Farr, Certified Elder Law Attorney and retirement planner at Farr Law Firm; and Joel Stich, Senior Managing Director at HSA Bank — what questions every pre-retiree should be asking themselves. Here's what they had to say.
1. Will my savings actually be enough? The common rule of thumb — saving 10 to 12 times your annual income — is only a starting point. What really matters is whether your money can produce steady income for 30-plus years, after accounting for inflation and market swings. A better check: add up projected monthly income from all sources (Social Security, pensions, investments) and see if it covers your expected expenses.
"What replaces the buffer of a working income is structure," says McInerney.
2. When should I claim Social Security? Claiming before your full retirement age means permanently reduced benefits; waiting until 70 means significantly larger monthly checks. The right answer depends on your health, life expectancy, and how it coordinates with other income.
This decision deserves careful analysis, not a default, according to Farr.
Smart Senior Daily Staff
3. Which accounts should I draw from first? The order you tap your accounts — taxable brokerage, traditional IRA, Roth — has real tax consequences year over year. Getting the sequence wrong can mean higher tax brackets and larger required minimum distributions later.
McInerney notes that coordinating withdrawals across account types is one of the most valuable decisions you can make before retirement, while you still have flexibility.
4. How much will healthcare cost — and is Medicare enough? Healthcare expenses for retirees are rising at roughly twice the rate of general inflation, driven by Medicare premiums, prescriptions, and supplemental coverage.
Medicare Part B premiums alone have grown around 7% annually. Costs vary by individual health and longevity, but "healthier retirees may end up spending more simply because they live longer," notes Stich,.
5. Should I be using an HSA for retirement? Stich told Smart Senior Daily that most people treat Health Savings Accounts as a short-term spending tool, but they're also one of the few accounts with a triple tax advantage: tax-deductible contributions, tax-free growth, and tax-free withdrawals for qualified medical expenses.
Funds roll over indefinitely, making an HSA a legitimate long-term savings vehicle for healthcare in retirement. "An HSA can give you more flexibility and help address one of your largest expenses down the road," says Stich.
6. What about long-term care — doesn't Medicare cover that? Medicare provides little or no coverage for most long-term care services. Extended care can run $10,000–$20,000 per month or more and can rapidly deplete retirement savings.
Farr recommends exploring long-term care insurance, dedicated savings, or an advance Medicaid plan well before you need it — waiting until care is needed severely limits your options.
7. How will taxes affect my retirement income? Taxes don't stop when paychecks do. Withdrawals from traditional IRAs and 401(k)s, required minimum distributions, and even a portion of Social Security benefits can all be taxable. Without planning, many retirees pay far more in taxes than they expected. Strategies like Roth conversions and coordinated withdrawals can help minimize the bill.
8. Does retirement mean I have to stop working entirely? Not necessarily. Part-time work, consulting, or freelance income can supplement savings and delay the point at which you need to draw down investments heavily.
"Working either part-time or full-time can add value to your retirement experience in addition to providing supplemental income," Farr notes.
Gary P Guthrie
9. Do I have the right legal documents in place? Retirement planning isn't just financial. Durable powers of attorney, healthcare directives, and an estate plan ensure that decisions can be made on your behalf if you can't make them yourself. Getting these documents in order before retirement — not during a health crisis — is part of a complete plan.
Let's do some quick calculations to see what you might be able to afford
Can I afford to retire?
(income vs. expenses)
need to last
needed from savings
savings run out
This calculator provides a general estimate for educational purposes only and is not financial advice. Results are based on simplified assumptions and do not account for inflation, investment returns, taxes, or changes in Social Security benefits. Please consult a qualified financial advisor before making retirement decisions. © Smart Senior Daily
Disclaimer: The information provided by these financial consultants is for general informational purposes only and does not constitute financial, legal, or tax advice. Retirement planning is highly individual — consult a qualified financial advisor, tax professional, or attorney before making decisions about your retirement.
