In 2019, I visited a speaking coach in Milwaukee. At the time, I was speaking to groups of retirees about 100 times per year. The coach’s job was to sharpen my delivery, body language, etc. But he said something to me afterward that really stuck: “If you’re speaking to retirees and not answering the questions do I have enough, will it last, and what if something happens to me, you’re missing the point.”

I was used to speaking on much more technical topics, so I took issue with this advice, thinking to myself, No, he was wrong; retirees care about the new SALT caps under the TCJA. Whoops. As it turns out, I was the one who was wrong.

Our team surveyed more than 500 retirees over the next year regarding their biggest questions and concerns related to retirement. Not one mention of SALT caps. Far and away, running out of money was the major concern. While they used different language, essentially everyone wanted to figure out the three questions below.

1. Do I have enough?

This was most frequently asked by those right on the verge of retirement. ING really nailed this one with its “What’s your number?” campaign about 20 years ago. I believe everyone should have a number. It doesn’t mean that you have to — or even should — walk away when you hit your magic number. It is your financial independence number, and it will change your perspective on your work once you hit it.

Every legitimate financial planning software can tell you this figure. You can access a free version of the tool we use.

If you’re looking for a back-of-the-envelope approach, read my article Find Out in Five Minutes If You Have Enough to Retire.

2. Will my money last?

This one is much tougher to answer because of the twists and turns life throws at us. Retirement projections often span 30 years. Imagine trying to accurately predict, at age 35, where you’ll be at 65. Here’s my best advice on how to best address this:

Focus on planning more frequently rather than planning perfectly.

Our clients’ plans are updated in real-time as their assets are linked to their plan. Our assumptions within the planning software are updated annually. We revisit goals every six months. This is an extreme example from a firm that specializes in just this.

You may not need to do what we do to ensure that your money lasts, but you cannot approach financial planning like many people approach estate planning: Get it done when your kids are born and then forget about it. (And, truthfully, that’s not the best way to do estate planning either.) I’d recommend revisiting your financial plan at least once a year to ensure that you are following the path and that path is headed in the right direction.

Avoid big behavioral mistakes.

A client sent me a message in March 2020, after markets had dropped by about 35%, telling me he wanted to sell all of his stocks. That move, in his situation, would have led to his running out of money. We all know we are not supposed to sell in market downturns, but life can be scary, and it’s easier said than done.

So, often, our job as financial planners can be about helping clients avoid that one big mistake. It could be selling at a low. It could be feeling enticed by some exciting new investment with supposedly “guaranteed returns.” The bottom line is if you feel tempted to make a big move, talk to someone about it first.

Draw income based on some academic methodology.

Probably the most well-known retirement income rule of thumb is the 4% rule: e.g., you can draw $40,000 per year off of a $1 million portfolio in retirement. While this is the most well-known “rule,” there are certainly others that may make more sense for you, depending on your goals. There are guardrails for those who want to spend a bit more but are also willing to take a pay cut in down markets.

Whatever approach you take, what’s most important is that you don’t deviate from it. It’s kind of like training for a marathon. The actual training program you use won’t matter if you don’t do the workouts.

3. What if something happens to me?

This risk is mitigated in your younger years via life insurance and disability insurance. As you get older, you may shift from an insurance need in those categories to a long-term-care insurance need. Ending up in a nursing home is by far the biggest, and hardest, risk to address for retirees.

Wealthy folks may be able to pay for nursing care out of pocket. Those who have not saved may be able to use Medicaid. If you are in the middle, you want to stress-test your financial plan to make sure that if something happens to you, your loved ones are taken care of.

When you zoom out on your specific retirement questions, odds are that you will land on one of the three above. Don’t ignore them.

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