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Wealth column: 5 questions to ask your financial adviser if you're retiring in 2018

Bruce Helmer and Peg Webb, financial advisers at Wealth Enhancement Group and co-hosts of “Your Money” on KLKS 100.1 FM on Sunday mornings.

At least once a year you've been meeting with your financial adviser to make sure you're on track for retirement. But this year it's different.

This is the year you're planning to retire and your annual meeting may be more important now than ever.

We've compiled a list of five questions you should ask your financial advisor at your next review if you plan to retire in 2018.

1. How will tax reform affect my bottom line?

It's been all over the headlines since the Trump administration took office in 2017, and it will be important to continue keeping an eye on changes to taxation throughout your lifetime. Any adjustments to the tax code could affect the way you withdraw money in retirement and could change the kinds of tax breaks you might receive. Ask your adviser how he or she is keeping an eye on how this fluid situation—and how it could change your retirement income.

2. How should I prepare for health care costs?

According to a 2015 study by HealthView Services, a healthy, 65-year-old couple could expect to spend $266,000 during their retirement on Medicare premiums. That doesn't include the money you'll need for out—of-pocket costs, nor does it include the cost of long-term. Talk to your adviser about long-term care insurance, if you don't have it already, and about how you can budget for those premiums and other medical costs into your retirement income plan.

3. When should I apply for Social Security?

Social Security filing can also be a tricky thing to maneuver. Do you start withdrawing the day you retire? Or can you wait until full retirement age to get your full benefit? Or even better, can you wait until age 70 when you can get an extra bump in your Social Security payouts? You can start taking Social Security before full retirement age, but your benefit will likely be around 75 percent of what it would have been if you had waited to claim until full retirement age. What's more, you'll continue to receive that reduced rate for the rest of your life.

By the same token, if you defer your benefits, you maintain that higher payout as well. Talk to your adviser about what makes the most sense for you and your future.

4. What should I do with my employer-sponsored 401(k)?

You have several options. You can keep it with your former employer, move it to another 401(k) account, cash it out,, roll it into an IRA, or roll it into a Roth IRA. With a Roth conversion, it's important to note that you would have to pay income tax on the amount you convert, but you wouldn't have to pay any tax when you withdraw the funds, which could save you money in the long run. This is an extremely complicated situation, so it's in your best interests to consult someone who is well-versed in tax strategies and retirement income planning.

5. Where is my retirement income coming from after retirement?

This may be the biggest question of all. Your adviser may be doing a great job growing your money while you're putting it away, but how will they be able to help when you are taking it out of those accounts? How will they maximize tax efficiency so that you can keep more of what's yours? Will they ensure you're taking IRS-mandated Required Minimum Distributions at the right time, and will they tell you the amount you need to withdraw? If you aren't satisfied with their answers, consider interviewing a new adviser. Your financial adviser should be equipped to help you feel confident about your financial future at every stage of your life.

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