10 Retirement Planning Moves to Make Now

These steps will put you on a path to a comfortable retirement.


There is no one-size-fits-all solution for retirement planning. Most people have unique situations regarding their finances and living arrangements. But there are some steps everyone can take to improve their financial situation. These ten steps can help you get on track to a secure retirement.

1. Get out of debt. The number one killer of retirement dreams is debt. Debt payments destroy cash flow and tie up resources you could use for a better standard of living. Eliminating debt should be your number one financial priority.

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2. Earn more than you spend. Most people will advise you to spend less than you earn. But you can only cut back so much before there are no more expenses you can reduce. Reducing your expenses is always recommended, but so is increasing your income. You can do this by asking for a raise, finding a new job, or taking on consulting or part time work. Living paycheck to paycheck won't cut it if you want to save and invest enough for retirement.

3. Save for a rainy day. Once you have a little extra cash flow, save it. Don't invest it, fix up the house, go on vacation, or do anything else with it. Save it in an emergency or rainy day fund. The purpose of this fund is to serve as cash reserves for unexpected expenses such as home or auto repairs, medical expenses, or anything else that pops up without warning. This preparation can go a long way toward protecting your assets. Once you are comfortable with the size of your emergency fund you should move to the next step.

4. Invest. Utilize tax-advantaged retirement accounts offered by your employer and individual retirement accounts. Don't know where to start? Consult with your human resources representative to begin a 401(k) or check out some of the best IRA companies to get started on a personal plan. Once you max out investments with tax advantages, start investing on your own. Mutual fund houses and discount brokers are great places to get started.

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5. Manage your personal risks. Insurance is one of the most unappreciated parts of a retirement plan. Insurance can save you thousands of dollars, and more importantly, provide peace of mind. Make sure you have adequate coverage for health, life, and long-term care in addition to the standard home and auto insurance.

6. Manage your investment risks. Proper asset allocation is a good way to mitigate your investment losses during market corrections. You should review your investment portfolio at least once per year and with every major life event.

7. Estimate retirement cash flow and determine if you need more. Cash flow is your best friend once you reach retirement age. Common sources of retirement income include Social Security, pensions, and individual investments. If you don't have any retirement income already lined up, start thinking about ways you can increase your cash flow. Real estate, dividends, and other investments may also be good ways to create retirement income.

8. Create an estate plan. Creating a will and estate plan will save your heirs countless hours of heartache and frustration. Depending on the complexity of your estate, these documents could potentially save a lot of money. Visit with a lawyer who specializes in estate planning to determine your needs and the best estate plan for your situation. Your survivors will thank you.

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9. Estimate your retirement needs. If you are only a few years away from retirement, you may have a good idea of how much you will need to maintain your quality of life. Spend an evening going through your investment portfolio and determine if you are on track. If you are far away from your retirement date, take a look at your current progress and determine if you are on track based on back of the envelope estimates. The further away you are, the more flexibility you have.

10. Meet with a professional financial planner. Anyone can benefit from a second set of eyes looking over your retirement plan, especially from someone who does this for a living. You should meet with a professional even if everything appears to be on track because you may have missed an important part of your retirement planning. If everything is going well, then you can be more relaxed knowing your retirement plan is on track.

Ryan Guina is a U.S. military veteran, writer, and professional in the corporate world. He blogs at Cash Money Life and The Military Wallet.