10 Things You Should Do as You Prepare for Retirement

By Home Bay

Posted on May 10th, 2017

For optimum success, you should start planning for your retirement early in your career. But, regardless of age, there are a number of things you can do to prepare for a happy, healthy future. Follow these steps ten simple steps to accomplish your retirement goals!


  1. Save as Much as Possible:
    Whether you are just starting to develop a retirement plan or you are nearing retirement, saving is the key to reaching your goals. As a general rule, you want to save roughly 10% of your income throughout your career, and if possible, save more toward the end of your career. In general, if you ever find yourself in a position where you have the means to save more every month, don’t hesitate to do so.

  2. Set Realistic Goals:
    There’s a fine line between saving aggressively and stretching yourself too thin. To make sure you have money for all your necessities, carefully evaluate your monthly expenses and budget. Then, set goals that make sense for your financial situation, your activity level and your plans for retirement. For example, if you plan to travel during retirement, you need to save extra funds for travel costs.

    You’ll also want to consider health insurance and healthcare costs as part of the withdrawal plan after retirement. Since an employer won’t be paying for part of the health insurance costs, your expense will usually increase after retirement. Health care costs typically also rise as you age and need more medical care.

  3. Take Advantage of Employer Benefits
    Employers often offer a 401(k) plan or a similar retirement plan. Some employers may also provide a pension plan. Make sure you learn about the employer benefits and maximize your opportunities to get the most out of your retirement plan. For example, if your employer offers a company match in a 401(k) plan, then make sure you’re contributing the maximum match amount to increase how quickly you can build up your savings.

  4. Clarify Your Financial Needs During Retirement:
    As a general rule, you can plan to withdraw roughly 4% of your retirement savings per year to cover your living expenses. But depending on what you determined as you worked to set goals, you may need more money than that. A simple way to calculate the amount you must save is through your current expenses. For example, if you spend roughly $40,000 per year on basic living expenses, then you need $1,000,000 to retire comfortably.

  5. Evaluate Your Housing Needs:
    Housing is a key part of retirement- and in many cases, you may want to downsize as you head into retirement. A smaller house, townhome or condo will have lower maintenance costs, taxes and other expenses than a single family home. Furthermore, you may be able to sell a current home and purchase a new home without a mortgage or with a very small loan. If you have excess funds from your home sale, you can also use that money to add a bulk sum to your retirement savings.

  6. Keep up With Your Assets:
    The last thing you ever want to do is borrow from your retirement accounts, so you have to make sure you have funds in other places that you can use in case of an emergency. That’s why it’s smart to track the value of all your assets – including your house, vehicles, and investments – on a monthly basis. Doing so will help you buy and sell when it makes the most economic sense – and will give you anytime access to liquid assets you can leverage if you ever find yourself in a financial bind. You can always sell your car and buy a more affordable one when you have the funds to do so, but you can’t rebuild your retirement savings overnight.

  7. Take the Initiative to Stay Healthy:
    Healthcare costs can sneak up on you, and if you don’t take the time to prioritize your health when you’re young, you can really pay for it as you age. Be active and stay on top of annual exams, don’t ignore symptoms, and prioritize semi-annual trips to the dentist to avoid a buildup of costly bills. And when you do see your doctor, if they offer tips on what you can do to improve your health, heed their advice!

  8. Consider Post-Retirement Activities:
    When you work, a large portion of your life is spent at the office or in your workplace. You will have more time available after retirement, so plan out some activities. For example, plan a few trips abroad or plan to work as a volunteer in your local community. Or, if you’re an avid golfer – look for a property that’s in a retirement community with a golf club. Whatever you decide to focus on, make sure you run the numbers and accommodate for your planned hobbies in your retirement savings goals!

  9. Evaluate & Adjust Your Investments:
    When you first start your retirement plan, you’ll want to invest a large portion of your funds in aggressive options – like stocks, a house or other tangible assets. However, as you near retirement, you’ll want to lower your risk by adjusting your investments so they are less volatile. You could consider moving your investment portfolio to bonds or could keep your house when you downsize and use it as a rental that generates passive income. These considerations will help maintain your lifestyle.

  10. Build Strong Relationships:
    Relationships with friends and family change after retirement, and you may not keep up with your previous co-workers. Before you get to retirement, make an effort to build positive and lasting relationships with local family, neighbors, and individuals in your age group with similar interests. Doing so will help you make sure you’ve got a great group of people to share your retirement hobbies with!

Preparing for retirement is a long-term process and you should start early in your career to reach your goals and improve your savings rate. But even if you start late, you can reach your goals by taking advantage of company programs, focusing on saving and downsizing your home for a lower cost of living.

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Posted in Personal Finance