5 simple retirement planning questions to ask yourself

How prepared do you feel for retirement? Not just financially, but logistically. Sometimes we are so focused on making sure we have enough savings for a secure future that we forget to think through the bigger picture.

Asking yourself these five retirement planning questions can help you sketch out a clear vision of a future that works for you—one that's focused on turning you and your family's unique hopes and dreams for your retirement years into something tangible.

Thinking through your goals for retirement—including whether you'd like to retire earlier or later—is a crucial piece of the retirement puzzle. The average retirement age for men is around 65 and about 62 for women. Do you plan to keep working beyond that timeframe, or would you like your retirement party to come even sooner?

The age you plan to retire affects how much Social Security you qualify for as well as how much you'll need in savings to cover you throughout this new phase of your life.

The Social Security Administration will consider you to be retired when you start claiming your Social Security benefits. The agency uses your retirement age, along with your highest 35 years of income, to determine your benefit payout.

If you wait to retire until what's known as your full retirement age (which is between 66 and 67 years old, depending on your birth year), you'll receive 100% of your calculated payout. You can start claiming your benefits as early as age 62, but they will likely be reduced—possibly by as much as 30%.

On the flip side, you can generally receive even more than your full benefit amount if you delay your retirement. You'll receive incremental credits as a trade-off, possibly up to 124% of your calculated benefit if you were born in 1960 or later or higher if you were born in 1959 or earlier. (The amount stops increasing at age 70, even if you continue to delay benefits.)

Here's a simplified example of how early, full and delayed Social Security benefits compare if your monthly benefit at a full retirement age of 67 is $1,000:

• If you start taking benefits at 62, your monthly amount would be $700.
• If you start taking benefits at 67, your monthly amount would be $1,000.
• If you start taking benefits at 70, your monthly amount would be $1,240.

If you're married, factoring in the age at which your spouse wants to retire can help you both optimize your Social Security benefits.

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At the heart of this question is the uncomfortable prediction of how long you'll live. The Social Security Administration estimates that, among people who reach age 65, men will go on to live until age 82 and women until 85. Of course, lifestyle choices and personal situations—such as exercise, diet, your overall health and your family health history—can influence your life expectancy.

Whether you foresee yourself living on retirement funds for one decade or five, it's generally better to overprepare. After all, it's not just day-to-day expenses you'll need to cover. In addition to the fun stuff, like vacations and gifts to family members, you need to budget for expected and unexpected health care costs that Medicare won't cover.

It's natural to be concerned about living longer than you expect and straining your retirement savings, a peril that is known as longevity risk.

While your Social Security benefits will last as long as you live, you shouldn’t rely on them to fund your entire retirement. On average, Social Security will replace about 40% of your annual pre-retirement earnings.

That's why it's so important to invest in a mix of savings vehicles. Some of the most common options include:

Some tax-advantaged retirement plans offered by your employer, like 401(k)s and 403(b)s, are funded through payroll deductions.

Why you should contribute to one:

• It's an easy way to divert a high annual contribution toward retirement.
• Your employer will often match your contributions up to a certain percentage.
• You can take advantage of tax-deferred compound interest.
• Traditional 401(k) contributions lower your taxable income each year and could move you into a lower tax bracket.

IRAs are tax-advantaged accounts that you can purchase through a financial institution or on your own. The two primary types of IRAs are traditional and Roth.

Consider investing in an IRA if:

• You don't have an employer-sponsored retirement plan.
• You've already contributed the maximum amount to your employer-sponsored account and want to contribute more toward retirement.
• You want more investment options than your employer-sponsored account provides.
• You want to benefit from a potential immediate federal income tax deduction. (In this case, consider a traditional IRA.)
• You want to benefit from tax-free qualified distributions in the future. (Then consider a Roth IRA.)

See how to supercharge your savings with an IRA.

A deferred annuity is an insurance contract that may provide retirement income over a specified period of time in exchange for a lump sum payment or premium payments. Regardless of how near or far away from retirement you are, you can defer your income stream until later to give your investment time to experience tax-deferred growth. Consider investing in a deferred annuity if:

• You want another guaranteed income source during retirement.
• You want to delay claiming Social Security benefits.
• You have already contributed the maximum amount to your IRAs or employer-sponsored retirement account.

Learn more about the types of deferred annuities available.

A brokerage account from a financial institution allows you to buy, hold and sell various financial assets and investments, including stocks, bonds and mutual funds. Consider investing in a brokerage account if:

• You want flexibility in accessing your money. (Keep in mind: Tax-advantaged retirement accounts have strict contribution and withdrawal rules.)
• You are comfortable potentially paying taxes on your earnings (i.e., dividends, interest and/or capital gains) each year.
• You want to diversify your assets within a single account.

See investment options available through Thrivent.

One of the greatest perks of retirement may be the freedom to live wherever you want. That could be closer to loved ones, a faraway locale you've always adored or perhaps the very place you are right now.

As you think through where you want to live during retirement—based on your goals, income and health—consider these kinds of questions:

• If you want to stay in your house, will you be able to invest in home modifications for safe living as you age? The national average cost of a new walk-in shower is $9,000, for instance.
• Should you downsize in retirement? There could be both financial advantages and drawbacks to moving to a smaller home.
• If you move, do you have the interest and resources to buy a retirement home? Or would renting better suit your needs?
• Can you afford to live in your dream location? The cost of living in a new area could be different from where you live now. Taxes, health care costs and housing prices can vary widely in different states.

You don't want to ask yourself 10 or 20 years after you've retired if you could've done more. In this way, retirement is the time for you to think big.

Heading into retirement doesn't mean your productivity is coming to an end. If you plan well for your retirement, it can be the era of your life when you're most able to pursue your passions. Achieving your best retirement life may just be a matter of determining what's significant to you—and going for it.

A study found that top hobbies among U.S. retirees include cooking and baking, reading, caring for pets, gardening and traveling. Here are some potential costs associated with these pastimes:

• Popular models of induction stoves range from roughly $1,100 to $4,400.
• E-readers can vary in cost from less than $200 to more than $500.
• The average new dog owner pays around $1,750 in ownership expenses per year.
• The average household spends $616 per year on lawn and gardening activities.
• Travelers age 70+ spend an average $6,777 on travel.

Get creative as you look toward your future. That's the advantage of starting retirement planning early—you have time to prioritize your big dreams and work the financial figures to see if you'll have what you need to pursue them full-force.

Or, maybe you're not be quite ready to leave the workforce altogether. A part-time job can provide some extra discretionary income. Of course, retirement can also be a time to pursue interests in ways you never could before. Understanding your goals can help you determine if your savings plan will get you there.

While many aspects of your life may be different after you retire, taxes remain a constant. According to Thrivent's Retirement Readiness Survey^*, 75% of those surveyed expressed some level of regret about the way they had planned for their retirement. The survey found that the most valuable piece of advice retirees would have given their younger selves would be to learn about tax implications for their retirement savings. Your tax professional and financial advisor can help you understand the tax liabilities you'll face in retirement.

You can also be proactive in finding ways to reduce your tax burden. You can strategize tax-efficient moves to incorporate into your retirement plan, for example, and work through options to minimize taxes on your Social Security benefits.

In addition, be aware of tax-related changes on the horizon that may prompt you to make adjustments (your financial advisor can help here, too). For instance, a series of tax law changes with the Tax Cuts and Jobs Act are set to expire at the end of 2025 that could alter the marginal rates for most individual tax brackets.

Get a comprehensive overview of what to expect for taxes in retirement

A financial advisor can help you navigate the complexities of retirement planning. Sometimes it's helpful to prepare a list of questions ahead of time.

Here are some to consider asking:

• How can I determine how much money I will need in retirement?
• Am I on track to be able to retire by my target date?
• When should I apply for Social Security benefits?
• What changes should I make to my retirement portfolio?
• How can I prepare for tax liabilities when I retire?
• What are some ways I can save for retirement while also pursuing other financial goals, like paying for my child's education?
• How can I plan for potential setbacks, like a job loss or major medical issue?
• What are the biggest financial mistakes I should avoid to have a secure retirement?