How you fund your retirement may be the most important financial decision you ever make. Even for those people who systematically save up in anticipation of their retirement can be overwhelmed with the particulars of making the transition as they get closer to their target retirement date. You can't help but wonder, am I ready to retire? Consider these questions to figure that out.

1. What lifestyle do I want to live in my retirement years?

If you haven't already started to think about how you want to spend your retirement years, now is the time to start figuring out your vision for your after-work years. It's not as easy as just picking out a simple plan for those that want to start a new business during their retirement, or someone else who is committed to travel all around the world for the first five years, or another who wants to continue to work part-time. There is just no such plan that exists. A financial plan is only as good as the information it's based on. Once you know where you're going and how you want to spend your retirement years, you can start assessing different scenarios and appropriately addressing the financial shortcomings.

For instance, if you want to start a new business you will need to determine how much start-up capital you will need and how that will affect your retirement budget, while being mindful of the tax situation for the business. And, as a backup plan, you will need to take into account the new venture's effect on your retirement income if it happens to fail or if you have a change of heart and just decide to give it up and do something else. Even sitting back and relaxing at home can have substantial financial implications, especially if you want to pass wealth along to your heirs. Having a clear sense of what you want to do is paramount. The finances are organized around the vision.

2. Do I have what I need to cover my basic lifestyle needs and primary goals?

After the precipitous market declines in 2008 and 2009, most portfolios have lost much of their values and are worth less today than they were a few years ago, which has a substantial impact of retirement planning. It's crucial to take a look at your investment and see whether you may need to make some changes to your objectives. Prioritizing your financial goals now, separating those things that need to be part of your retirement plan and those that you can at least temporarily live without, you'll be ready for the tradeoffs later down the road in case your investments move against you or you encounter unanticipated expenses. For example, if you have dreams of buying a summer home for you and your spouse, is that a goal so important that you would be willing to delay your retirement for it?

3. Do I have a retirement plan that is set to provide me with the income that I need?

Once you have prioritized your objectives, translate your targeted retirement savings into an income stream that fits your needs that is aligned with your risk tolerance. Consider a proactive retirement approach. A strategic retirement planning approach actually has you structure your portfolio into three different portfolios each with a specific objective in mind. The short-term portfolio is designed to include high-quality fixed income assets that may generate consistent income and liquidity to meet you basic day-to-day needs. The intermediate-portfolio is structured to make sure you generate a good return from your assets over a longer period of time and so that you can take advantage of any opportunities that may arise in the markets. It's also used as a backup source to replenish your short-term holdings when markets are down.

4. Am I adequately prepared for the costs of healthcare both for short-term care and long-term care in the event that I need it?

Healthcare costs are only rising and are a major concern for anyone approaching retirement. Long-term care expenses, whether in a nursing home or a private home, are continuing to rise outpacing the rate of inflation, with the cost of private nursing home care currently running around $75,000 per year. What's even more that can have substantial retirement planning implications is that 70% of Americans 65 and older are estimated to need long-term care services.

Some brush this off, but the fact is that Medicare doesn't cover these costs. One option is to set aside money to pay for care it needed. Another possibility is to buy long-term care insurance, which will pay some specified amount for at-home care or nursing home care. Even more, you can take advantage of new changes in IRS regulations that allow you to take distributions out of your non-qualified annuities to fund a long-term care policy without being subject to federal income taxes.

5. What if my retirement vision is different from my spouse's?

Most often than not, couple have different ideas on how they want to spend their retirement. You may want to spend your after-work years relaxing at home, spending more time with your grandchildren by going to their sports games, or maybe indulging in a hobby, while your spouse may have the inclining to get out and travel around the world. Obviously, these expectations are dramatically different and can put unnecessary stress on both partners. The key is to talk it out with your spouse on how each wants to spend these years. Having a specific vision will make the planning process much easier because it allows for the plan to be more dynamic with flexibilities built inside in case changes are warranted. A clear vision will help the couple step ahead and definitely make you happier in the long run.