Studies show most of us don’t have a retirement plan, yet we fear not having the resources to live out our lives more than death itself. Here are a few things you should do and a few things you should avoid when planning for retirement.


  • Define what retirement means to you: Like most things in life, retirement is an individual pursuit, but how you spend those years will affect the course of your planning. Imagining what retirement means for you will help determine how much money you’ll need to make those dreams come true and what assets are available.
  • Plan and plan often: Less than half of Americans have any idea how much they need to save for retirement. Even fewer have a plan to reach that goal. With life expectancy on the rise, the unavoidable fact is that many will run out of money. The only way to achieve peace of mind and security is to determine where your retirement income will come from, how much money you will need and how to make your money last as long as you do.
  • Create a budget: Creating a retirement budget is challenging, but it’s the only way to determine how much money you’ll need. Experts suggest you plan for 80 percent of your current monthly budget as a starting point. Track your monthly expenses for several months to get an idea of where your money goes. Don’t forget to factor in things like inflation and debt.
  • Expect the unexpected: Think of all the little things that come up in your daily life now, unexpected repairs and emergencies. Such budgetary surprises will continue during your retirement and may even become more frequent. Make a back-up plan part of your overall plan.
  • Create a social network: Whether you realize it or not, working provides a social network which keeps you engaged with the world. Lack of social interaction is a pitfall for many retirees, one that can lead to health problems. Creating avenues for social interaction well before you retire will make the transition much easier.
  • Get help: Funding retirement, budgeting and wading through a host of options can be a daunting task, but a lack of action can cost you money. If you feel overwhelmed or intimidated, get professional assistance.


  • Wait: Einstein may not have actually commented on the power of compounding interest, but the force of this economic principle is nonetheless tremendous. Socking away money for retirement at an early age gives your money a chance to work for you. Likewise, investments and other savings devices benefit from time to grow.
  • Spend retirement money early: It may seem like a good idea to use money from a 410k to pay off a credit card or take a vacation, but you’ll be taking a huge loss. Uncle Sam will penalize you, and you’ll miss out on years of interest. Don’t touch it, and if you change jobs, roll that money into an IRA or other eligible account.
  • Retire too early: Social Security benefits are an important part of most retirement plans, but the amount of your monthly payment varies considerably depending on what age you opt in. Incentives end at age 70, but until then waiting can pay off.
  • Leave money on the table: Most of us do not take full advantage of employer matching 401k contributions or other savings plans, which is really like throwing money away.
  • Count your home as an asset: If you sell your home at retirement and move into less expensive digs, you may make a profit that can be used to fund retirement. However, home values and real estate markets can be volatile. Furthermore, counting your home as an asset can discourage other savings.
  • Ignore your health: Staying on top of your health care, maintaining a healthy weight and exercising regularly will decrease the chances of major health problems later in life. This can lower your costs and yield a higher quality of life.

Sources: AARP, Prudential,

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