Retirement planning

Retirement: 10 Things You Need To Know BEFORE You Retire

Share with Friends

Everyone dreams of their retirement but people spend more time planning their vacations than they do retirement planning. Many would like to retire even though they do not have a clear plan in place to do so. Others are not interested in leaving their careers and plan to continue working.

The Top 10 Things to Consider Before You Retire

  1. Only 40 percent of Americans have calculated how much they need to save for retirement. Start making a plan now.
  2. Experts state you will need approximately 70-80 percent of your current income in retirement to maintain your standard of living.
  3. In 2018, almost 30 percent of employees with access to a defined contribution plan (such as a 401(k) plan) did not participate.
  4. The average American spends roughly 20 years in retirement. With increasing life spans it may even be longer. Are you prepared?
  5. Nearly two-thirds of 40-somethings have less than $100000 in retirement savings. By age 50 you should have at least 6 times your salary in savings.
  6. It is never too early or too late to start saving. With compounded interest and catch up allowances, you can make a significant impact on your savings.
  7. Make paying off debt a priority. Learn how to make additional principal payments so you can pay off your debt faster. Do not create new debt.
  8. Find out what your social security payments will be. Most people have no idea what the monthly benefits will be so it is important to have a realistic expectation so you know where you stand.
  9. Take advantage of IRAs. You can put money into an IRA with pre-tax dollars. This can be a benefit because it can put you into a lower tax bracket and help you to reduce your tax liability while saving for retirement.
  10. Ask questions. Doing nothing is a sure-fire way that nothing will change. It is important to meet with professionals who can help to educate you about financing your retirement. It is also important to investigate all of your options with your employer.

As a retired banker, I can not tell you how many people I worked with that was ill-prepared for retirement financially. Many folks in the baby boomer generation are trying to make ends meet with a part-time job and social security. Or they are not planning on retiring at all. This can be unrealistic when taking health concerns and job losses into consideration. There are things you can do even if you are a few years from retirement.

How to Calculate What You Need

Many experts will tell you that you will need 70-90 percent of your income for retirement but let’s think about this logically. Unless you are living the same exact lifestyle with the same expenses, many seniors are able to live with significantly less during retirement.

You can downsize your home, reduce your debt, taxes and maintenance payments or move to an area with a lower cost of living. If you live in NYC and decided to live outside of Orlando, Florida, chances are you can reduce your expenses by more than 50%.

Social Security

You can use this Social Security Calculator to see what you will receive when you retire. Also, check your retirement calculator located on your investment fund website to get an idea of the monthly or annual income you will receive from your investments.

When considering what age you will retire, you can see on your social security calculator there is a difference in the income if you retire at age 62, 66 or 67.

You can start receiving your Social Security retirement benefits as early as age 62. However. you can lose anywhere from 25-35% of your benefits if you choose to retire early at 62. You are entitled to full benefits when you reach your full retirement age. If you delay taking your benefits from your full retirement age up to age 70, your benefit amount will increase.

Next, you will want to try to estimate your expenses during retirement. Take a look at your current budget and see what areas you can cut or reduce over time. This way when you retire you will already understand what your financial needs will be.

Start Saving Now

Regardless of your circumstances, you have to find a way to start saving. It may mean changing your lifestyle. If you are taking vacations, you can save. If you are eating out, you can save. You may have to make some sacrifices now to live comfortably in retirement.

Understand that when the employer is matching the contributions to a 401k, it is like getting free money from their employer. You can earn up to an additional 6% depending on your employer plan. Take advantage and save the most money you can while you are getting that free money!

Catch Up Contributions

Once you are age 50 or older you can start catch-up contributions if your employer’s plan allows it. As of 2020, you can save up to $19,500 plus an additional $6,500 for the catch-up contribution. If your employer does not allow for catch-up contributions, you can also start an IRA with your broker or bank.

Roth IRA 401k

Do Research on the Investments Available With Your 401k

I was shocked to learn that most people have no idea what they are invested in. They pick their funds based on the return history 5 or 10 years ago, then set it and forget it. While the set it and forget it mentality is good when it comes to taking money back out of your retirement accounts, funds can become stale and have bad years. It is important to understand the financial objectives of the funds you are investing in and revisit them regularly.

Risk Tolerance

You will also need to determine your risk tolerance to know which funds will be a good fit for your retirement plan. This will change as you age so you should also plan on adjusting your plans as you get older. Understanding appropriate asset allocation, or how much of your investments will be in stocks vs. bonds is an important part of your retirement strategy.


While it is important that you learn about the different funds available to you, it is also important that you learn about diversification. Often when one sector does poorly another sector will do well. With diversification, over time, you will most likely earn more being diversified, rather than having all of your eggs in one basket.

Pay Off Your Debt

I am always a little surprised how many people go into retirement with a mortgage(s) or serious debt. Paying off your debt before retirement is a smart move as it will free up your income so you not feel burdened going into retirement. Being debt-free was how I retired early!

Consider Downsizing

Many people get locked into the idea that they want to stay in their homes. This is not always realistic. If you own a home that you raised your family in, it may be significantly larger than you need. You can sell the home and pay cash for a smaller home with fewer maintenance costs, like a condo, thus lowering your expenses. Many people use the equity in their home to finance their retirement.

Do Not Originate New Debt

Often new retirees will go and purchase items to satisfy their hobby dreams like an RV or boat. These depreciating assets can widdle away at your monthly income. If you need to sell quickly it is rare that you can sell these items for more than you owe if you did not put a significant amount of money down.

It is not only important to pay off your debt but also to stay out of debt in retirement.

When Should I Start The Retirement Process?

Truth be told, the retirement process should have begun in your 20s, or as soon as you are working. Unfortunately, many of us were unable or unwilling to make retirement a priority.

The fact is, it is never too soon or too late to prepare for retirement so there is hope to get caught up. Retirement planning needs a clear strategy and commitment to that strategy.

Your retirement planning should be more focused as you approach your 40s. At this point, you have 25 years to make up for lost time if you are behind. No matter what your age is you need to have a focused plan.

Many plan on continuing to work but that is not realistic either. Health concerns and downsizing can force you to retire. It is important to have a backup plan even if you want to continue to work in case you are downsized or your health prevents you from working.

What Do You Need To Do 10 Years Before You Retire?

If you are within 10 years of retirement it is important to make sure you are on the right track. There are some important questions you need to address at the 10-year mark.

  • Will your debts be paid off before retirement?
  • Do you know what your income will be during retirement?
  • Do you know what your expenses will be?

It is important to know this ten years out so you can adjust your plan if you are not where you want to be. Of course, it will not be 100 percent accurate. You have little control over the cost of living adjustments, etc. But understanding your current realities is the key to making corrections and bringing about change before it is too late.

The adjustment may just be focusing on getting promoted so you can save more, or focusing on becoming debt-free. You should also have other retirement accounts in addition to your 401k at this point in the process. Adding as much as the law allows into those accounts at this time can make a huge impact on your retirement.

You will want to do annual reviews of your financial situation every year until retirement at this point. It is crucial that you stay on track so that you can live the way you want in retirement and keep it in front of you is the best way to do that.

What Do I Need To Do One Year Before I Retire?

One year before retirement it is important to make time to meet with your CPA, attorneys, and insurance advisors. There may have been changes to your circumstances as well as the laws in your state that you are unaware of since you made your initial plans.

I would also suggest meeting with your estate attorney to evaluate your will, healthcare mandates and trusts. Many retirees who would come in the bank had no idea that by moving to Florida, their will was no longer valid after crossing state lines.

Also, discuss the best way to protect your assets from creditors during your retirement. You may want to investigate setting up a living trust as a way to avoid probate and protecting your assets. Handling your estate now will save headaches for your heirs after you pass.

Final Thoughts

The key to retirement planning is sticking with a strong savings and debt reduction plan. Retirement planning does not need to be stressful if you are realistic about where you are and stay focused on where you want to go.

Unfortunately, I have had plenty of 60 something clients in front of me who was just having the realization that retirement was not going to be what they expected financially. The key is to be flexible and adjust your expectations if need be. Be open to new plans and make adjustments so you can retire comfortably.

5 1 vote
Article Rating

Share with Friends

62 responses to “Retirement: 10 Things You Need To Know BEFORE You Retire”

  1. Carrie Pankratz Avatar
    Carrie Pankratz

    Wow. There is so much to think about before retirement.

    1. Tricia Snow Avatar

      Yes, planning is an important part of retirement. Many folks just wing it.

  2. Cindy Avatar

    Excellent tips and suggestions! Everyone should know about planning for retirement while they are young. What a difference it makes.

    1. Tricia Snow Avatar

      Absolutely! Unfortunately, it is not taught in schools or by parents.

  3. Alice Avatar

    I semi retired at 62 for health reasons. I was not prepared at all. I work part time at Walmart and collect social security. I do all right but hindsight I wish I had made better choices years ago.

    1. Tricia Snow Avatar

      I know many people feel that way. You are not alone!

  4. Danielle Ardizzone Avatar
    Danielle Ardizzone

    I’m so terrible at financial planning – my significant other wants to start discussing it, so this is timely. Thanks!

    1. Tricia Snow Avatar

      That is great news that one half wants to start to take action. It is important that you allow that to happen and move forward. Procrastination never helped anyone! You can do this!

  5. Denise Lenahan Avatar
    Denise Lenahan

    Nicely done and a ton of great information. You guys definitely know what you’re talking about and thank you for sharing your wisdom and insight for us to read and know about now. Great job! 👍🏼

    1. Tricia Snow Avatar

      Awww … thank you, Denise! We have been through the ups and downs with life but having a plan and sticking to it brings things back around.

  6. Marianne Avatar

    Great read! As of next year, I will be at the 10 year mark. It will be time to start getting my plan together!

    1. Tricia Snow Avatar

      Great news! The ten years will fly by!

  7. Barbara Avatar

    Great information!

  8. Sandra Barrett Avatar
    Sandra Barrett

    Great advice. Hubby is retired and working for fun, I’m semi-retired and having a ball.

    1. Tricia Snow Avatar

      Thanks Sandra! Enjoy your retirement!

  9. Chelsea Avatar

    This is so important. Having watched both my in-laws and now my parents go through retirement in the last year or two, it’s an eye opener. And as a stay-at-home-mom, we’re basically on one income. Paying off debt has been our biggest priority. That’s done (other than our house), so now, I’m looking at investing. Going to pin this post for later! Thank you!

    1. Tricia Snow Avatar

      Investing is a great tool because of compounded interest. Sounds like a Dave Ramsey plan! Good luck!

  10. Sabrina DeWalt Avatar
    Sabrina DeWalt

    Good information to think about as I get closer to that age.

    1. Tricia Snow Avatar

      Great Sabrina! It is never too early!

  11. Lisa Avatar

    So many great things to go over before retiring. Going to share this with my dad as he is getting ready to retire soon.

    1. Tricia Snow Avatar

      Awesome Lisa! I hope he gets some insight.

  12. Sydney Avatar

    I’m not sure how accurate it is, but a young person like myself (under 30) probably shouldn’t even count on Social Security! It is so important to start saving early!

    1. Tricia Snow Avatar

      That is a great point. The experts are saying that Social Security is not really going anywhere but regardless, you will be scraping by even if you are debt free. It is important to save for sure.

  13. Suzan Avatar

    Great tips! I wish I had had these when I was younger to get a head start!

    1. Tricia Snow Avatar

      It is never too late to start!

  14. Misskorang Avatar

    So many important takeaways. I definitely will read and reread this. Thank you so much for sharing your depth of knowledge.

    1. Tricia Snow Avatar

      It is always my pleasure. I hope it can be a resource for you.

  15. Alyssa Avatar

    Great list on what to know when thinking about retirement!

  16. Suz @ Avatar
    Suz @

    Great info here!
    I had studied the whole SS and retirement picture assiduously, but wound up making a mistake.
    I knew that my retirement income from SSA would increase up til I was 70. ✔️ And, discovered that Survival Benefits maxed out at my FRA. ✔️
    So, my husband died when I was 60. I was still working, until I was 64. At that point, when I retired, I *should’ve* taken MY (lesser) SSA benefit, but I was fixated on reaching my FRA of 66 to take Survival Benefits, and blew it and lived off my investments for 2 years.
    Dummy! But, I’m ok now. Between my tiny pension from working 10 years at the Uni, my spousal benefits, and the rent payments from my house, I’m bringing in far more than I ever did whilst working.

    1. Tricia Snow Avatar

      Whew! I am glad it all worked out. There is definitely an art to choosing the right time to take Social Security income.

  17. Amy Irvin Avatar
    Amy Irvin

    Wow. This is a must-have guide. Thanks! I’m saving this.

    1. Tricia Snow Avatar

      Thanks Amy! I am glad it can be a resource for you.

  18. Lisa Manderino Avatar
    Lisa Manderino

    Great thoughts about planning for retirement. There are some important things to consider.

  19. Tiffany Smith Avatar
    Tiffany Smith

    Glad to have this list! We def need to up our contributions!!

    1. Tricia Snow Avatar

      It is like free money in the bank! Lol

  20. Debbie Avatar

    Very helpful info!! Didn’t realize the point about wills and state lines.

    1. Tricia Snow Avatar

      Many folks are shocked. You are not alone!

  21. Keirsten Avatar

    Thank you for this. It’s easy to push this to the side and leave it for later but it really is important to think about sooner.

    1. Tricia Snow Avatar

      Totally. So many wait too long and have to catch up when they could be enjoying life.

  22. Jan Oberson Avatar
    Jan Oberson

    Interesting article especially since I retired two years ago at age 56. I was lucky to have a good company pension plan. I’ve also reduced my expenses considerably.

    1. Tricia Snow Avatar

      That is so important. We did the same. Sometimes I miss having a larger home but just remind myself I no longer have to work.

  23. Kristin Avatar

    I know we’re not on track so far for retirement…thank you for this excellent info. It is something we need to get more serious about and put some time into planning.

    1. Tricia Snow Avatar

      I always try to think about the free money I am getting from the company match! It really helps!

  24. Holly Avatar

    Great insight.. especially about taking more time to plan a vacation! We all could use your expertise and insight to make retirement more enjoyable!

    1. Tricia Snow Avatar

      Thanks Holly! I hope it can be a resource for you.

  25. Julie Gazdecki Avatar
    Julie Gazdecki

    Great tips for us getting close to retirement. Working on paying off all our debt right now!

    1. Tricia Snow Avatar

      Best thing EVER! You can do it!

  26. kmf Avatar

    Such a great list of what you need to know about retirement. And love your strategies on how to help ensure your retirement expectations are met financially.

  27. Charlene Avatar

    Great tips and such an important topic! My husband just turned 40 this past week and I’m so thankful he started preparing for retirement in our 20s. No kidding! Best decision ever… thank you father-in-law for guiding us on that!

    1. Tricia Snow Avatar

      I think future generations will be better at it than some of mine and my husbands were. At least I hope so!

  28. Cathy Avatar

    Really great tips! We are getting close to retirement, I need to use this as a reference guide. Thanks

    1. Tricia Snow Avatar

      Yay! It is an exciting time!

  29. Alexis Farmer Avatar
    Alexis Farmer

    I’m pretty far from retirement but definitely need to be thinking about these things. You have lots of helpful info here, thanks for sharing!

    1. Tricia Snow Avatar

      Thank you Alexis! It is never too early or too late to think about retirement!

  30. heather Avatar

    Excellent resource.,Retirement is on my brain. I am 48 and Nicholas (youngest) is a freshman in high school. I have at least 8 years before I think about doing it. I keep plugging along and saving as much as I can.

    1. Tricia Snow Avatar

      Once you are able to use the catch-up plan you will see a huge increase in your funds With compounded interest you can really increase your reserves.

  31. Kendra Avatar

    These are such great tips! I love how you broke it down by when to do certain planning activities for retirement. I’m not so great at planning ahead, so this gives me a great place to start a good 15 years or so before I plan to retire. Thanks!

    1. Tricia Snow Avatar

      You can never start too early!

Leave a Reply

Your email address will not be published. Required fields are marked *

Affiliate disclosure
Posts may contain affiliate links that pay us a small commission to help support the cost of my site and are at no additional cost to you. We will only promote the products and services we love.  Thank you, our readers, for supporting us. See my Privacy Policy here. 

This site is a participant in the Amazon Services LLC Associates Program, an affiliate advertising program designed to provide a means for sites to earn advertising fees by advertising and linking to We are compensated for referring traffic and business to Amazon and other companies linked to on this site.

Buy me a coffeeBuy me a coffee
Recent Media for Born to Be Boomers

Join the Tribe so you can get all of our articles!

By submitting this form, you are consenting to receive marketing emails from: . You can revoke your consent to receive emails at any time by using the SafeUnsubscribe® link, found at the bottom of every email. Emails are serviced by Constant Contact

Would love your thoughts, please comment.x