Five Questions to Ask Your Financial Advisor Five Years From Retirement

Retirement doesn’t happen overnight.  Individuals should carefully plan for this transition, especially during the final five-year stretch.  As this milestone approaches, a financial strategy should shift from accumulation to preservation and income planning.  This period is also a time to anticipate risks, including inflation, healthcare costs, and market volatility.  Whether you’re feeling confident or uncertain in your position, sitting down with a financial advisor allows you to ask any questions you may have, so you can solidify your framework and feel secure about your preparedness. Here are five questions that can make all the difference.

1. Am I on Track to Meet My Retirement Goals?

Americans are divided on their retirement readiness, according to the Schwarz Center for Economic Policy Analysis, with a wide range of retirement anxiety from a high of 71% to a low of 32%. While age and status (working vs. retired) factored into the results, 5 of 8 surveys in the study showed more than 40% of participants felt anxious or pessimistic about their retirement future.  Vanguard and Pew report that many will fall short, with most income levels projected to land below targets even with Social Security.

Savers can ease their concerns and boost their readiness by consulting a financial advisor to review their savings rate, projected income needs, and employ gap-closing strategies, including catch-up contributions. This analysis usually involves tools to assess the chance of success, considering investment returns, longevity, taxes, and inflation.

2. What Will My Income Streams Look Like in Retirement?

Five years out, it’s important to map out expected income sources. These typically include Social Security, pensions, investment income, and withdrawals from 401(k) and individual retirement accounts (IRAs).  Claiming Social Security at the right time is especially important, as delaying 1–3 years beyond full retirement age (67) can increase lifetime benefits by up to 8% per year until age 70.  

Forming a “Bucket Strategy” helps manage withdrawal sequencing, prioritizing bonds or cash early and equities later.  Dividing income into three categories—Safety, Income, and Growth—reduces sequence-of-returns risk (the danger of poor market returns early in retirement) by avoiding the sale of equities during market declines.

An advisor can clarify where guaranteed income ends and variable income begins, and offer guidance on tax-advantaged Roth IRAs, Health Savings Accounts (HSAs), and possible annuity income options.  A diversified mix of income sources can help individuals sustain their lifestyles, covering both essentials and discretionary spending.

3. How are We Planning for Longevity, Healthcare, and Long-Term Care?

Many financially underestimate how long they will live and how much care they will need.  The average 65-year-old who retired in 2024 could face an estimated $165,000 in healthcare costs, excluding long-term care.  Yet a study by Jackson National Life Insurance Company showed that only 27% of individuals believe they’ll need long-term care, despite roughly 70% of those turning 65 eventually requiring it. 

4. How Will Inflation, Taxes, and Unexpected Expenses Affect My Plan?

Even modest inflation can diminish retirement income. While inflation has eased, retirees still feel its impact, especially on essentials like healthcare and housing. A 2024 Allianz survey found inflation is a top concern among retirees, surpassing even market performance.

Unexpected expenses such as home repairs and medical events are another risk.  To prepare, many advisors recommend 6–12 months of essential expenses in liquid reserves.

5. How Do I Prepare for Periods of Market Volatility in Retirement?

Sequence-of-returns risk can have a serious impact on portfolio longevity. History shows that market declines eventually recover. But the timing matters. An advisor can employ strategies to help.

Planning for volatility is essential for a well-crafted and long-lasting retirement. Working with an advisor can help set expectations and build a retirement plan that can withstand volatility without giving up lifestyle. Employing income strategies that remain consistent during unsettled periods in the market will help avoid making decisions that could impact retirement at the wrong time. 

Asking these five questions five years before retirement can transform your outlook on the future. A thoughtful, evidence-based strategy will help your income last, protect your lifestyle, and secure your legacy.  At SHP Financial, we are here to guide you and your family through this important phase of the journey.  If you are five years or fewer from retirement, now is the time to plan boldly and wisely.  Contact an SHP Financial advisor for a complimentary review of your finances today.