Key Conversations You Need to Have Before Retirement

Being adequately prepared for retirement involves far more than simply squirreling away money in a 401(k), annuity, or some other savings vehicle and sailing off into the sunset.

When laying the foundation for one’s golden years, it’s also a good idea to have conversations with a handful of key people in your life – such as your spouse or domestic partner, children, employer, and maybe even employees if you’re a small business owner.

Nearly all of these people will either be impacted by your retirement or will personally have an impact upon it, making such conversations incredibly important.

“Retiring is a major milestone in a person’s life, and it creates a ripple effect that impacts everyone close to the retiree,” says Marc Diana, CEO of MoneyTips. “Making sure your network is prepared for your retirement is vital to ensuring as smooth a transition as possible.”

Here are some of the key people to engage in discussion, both when you’re planning a retirement strategy and as your departure from the workforce gets closer to being a reality.

With Your Spouse or Partner

Many couples assume they have a shared vision for retirement, or that the vision (even when it is shared) is realistic, says Delynn Dolan Alexander, a financial advisor with Northwestern Mutual.

To ensure you’re actually on the same page about goals and dreams, discuss what it is that you would like to do once work has become a thing of the past, and whether there’s an expense associated with fulfilling those dreams. If there is, how are you planning to pay for it?

Identifying where you want to live (both the location the type of residence) is also important ground to cover, as is determining whether you want to continue working in any capacity during retirement, and what your financial priorities will be.

“In other words, are you spending all of your savings, or leaving a legacy for the kids or charity?” explained Dolan Alexander.

Coming to an agreement regarding long-term housing plans is particularly important, stresses Jennifer Beeston, vice-president of mortgage lending at Guaranteed Rate Mortgage. Often, couples vary wildly on what they envision for their housing upon retirement.

“Some people want to stay in their current home while others want to downsize or move to be closer to their children,” said Beeston. “You want to have a game plan regarding housing before you retire as each scenario requires a different set of monthly costs to consider.”

• Related: The Challenge of Moving to a Smaller Home

With Your Children

Like a spouse, your kids will also likely be impacted by the changing finances associated with your departure from the workforce.

Mark Charnet, founder and CEO of New Jersey-based American Prosperity Group, suggests having a frank discussion with children about your plans, particularly if you have a less than adequate retirement fund established.

That conversation may involve pointing out to children that you will now be on a fixed or reduced income and that although you’d like to be as generous as you may have been in the past, it will no longer be possible. Charnet even suggests telling your children that they should no longer ask you for money.

Your housing plans are another important topic to cover with children prior to retirement.

“Many people are surprised at the vehemence with which children are attached to an old childhood home, or conversely many retirees hold on to homes even though children have set up independent lives and households elsewhere,” says Diana.

Familiarizing children with your medical directives and providing them with the contact information for your financial advisor, estate planning attorney and CPA, is also a good idea.

This process can be simplified by establishing an online vault for all of your important documents and giving your children access, says Brian Saranovitz, co-founder of Massachusetts-based Your Retirement Advisor.

“While not everyone will be comfortable sharing their financial details with children, it’s good to give them some insight into your financial preparations for retirement and any financial directives in your will,” adds Saranovitz. “Sharing your plan will not only help them upon your death, but also during your retirement if you need assistance. It can also teach them some valuable lessons about preparing well for retirement.”

• Related: Avoiding the Trap of Financially Dependent Children

With Your Employer

Like it or not, employers have a profound impact upon retirement. During working years, an employer plays a key role in the growth of your nest egg. And as retirement nears, it’s time to find out if there are any company policies that may impact pensions or other retirement income.

“It’s important to seek help from your employer on transitioning out of the workplace and making sure you understand your options with your company 401(k) or pensions, profit sharing, and healthcare options,” said Saranovitz. “If your employer doesn’t offer these services, a financial or retirement planner can help you, especially with the options for rolling over your 401(k).”

Additionally, it’s a good idea to give your employer ample notice of your planned departure date. “A rule of thumb is that for however many years of experience an employee has, that’s how many months it takes to replace him or her, so the more warning you can give your employer the smoother the transition will go,” suggests Diana.

• Related: When Is It Time? (and Other Hard Questions About Retirement)

With a Financial Planner

Retirement can seem like a dark cloud hanging over many people’s heads. Not because we don’t want to retire, but rather because of the money questions surrounding that all-important distant horizon.

Fears about retirement preparations need to be faced head on, and a financial planner can help, says Dawn-Marie Joseph, founder of Michigan-based Estate Planning & Preservation.

“Most people dream about not going to work every day and having freedom from their alarm clock. But when you think of retirement and the amount of money you have or have not saved, it can be overwhelming,” says Joseph. “There’s no time like the present to think about and act on the savings you will need for retirement.”

Begin by creating a draft retirement budget for yourself and then meet with a financial planner to help map out a solid game plan that includes helping your money last for as long as you think you will need it. Bring your spouse or partner to that meeting with your financial planner, and work as a team to put together a realistic, long-term financial strategy.

“The last thing you want to do is outlive your savings,” says Joseph. “Retirement savings can be accomplished. It is all about planning to get it done.”

• Related: What a Good Financial Planner Does (and Doesn’t Do)

Mia Taylor is an award-winning journalist with more than two decades of experience. She has worked for some of the nation’s best-known news organizations, including the Atlanta Journal-Constitution and the San Diego Union-Tribune. 

More by Mia Taylor:

• The Biggest Retirement Risks and How to Prepare for Them
• Four Myths About Annuities: Do They Deserve Such a Bad Rap?
• Don’t Repeat These Five Mistakes Boomers Made on the Road to Retirement

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