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How to Prepare for Your Upcoming Retirement

How to Prepare for Your Upcoming Retirement

For people that have worked for decades, it is possible to see their retirement on the horizon. Everyone who wishes to retire within the next ten years needs to consider some steps now. It will go a long way to help ensure everything is set during retirement.

The kind of retirement plan you want will go a long way to determine your goal. Are you planning to freelance, volunteer, or travel? After this, you can come up with a workable picture of the financial resources essential and estimate if what you have at the moment will be enough. 

If there is a gap, strategize how you will structure all the different assets you need or tweak your vision to match what you have. When you examine your current expenses, it can open your eyes to things that need elimination.


For people that are within ten years to their retirement plan, here are essential steps to take:

  1. Diversify and invest for Growth

You might want to reduce risks, which makes stock an unpleasant channel. However, stocks might provide some impressive growth, which can be helpful in this stage of your life. As a result, an intelligent mix of bonds, stocks, and other assets that suits you is a good choice. 

Aim for a well-balanced portfolio that could help you stand against the storm and provide the income to help you take care of expenses in retirement. 

  1. Utilize Retirement Accounts and Catch-up Contributions 

Whenever you can boost your retirement contribution up to the cap of your IRAs, 401(k) and others, strive to have enough funds in your 401(k), which can qualify you for a maximum matching contribution from your employer. For people aged 50 and above, you might be able to set more aside, thanks to the rule for catch-up contribution. 

As the retirement period approaches, consider account consolidation. It could simplify your investment management and give a better picture of your entire retirement asset. Also, try and examine any 401(k) you might have with a former employer and consider your choice with 401(k) distribution alongside other consolidation. 

  1. Downsize Your Debt

Try and take care of all mortgage payments on time so you can finish them off before retirement. Pay for all major purchases in cash to avoid incurring new credit card debt. Limiting further obligations and reducing existing ones reduces the funds you will have to direct to pay interest on debts. 

  1. Estimate Possible Retirement Income

Deduce all income you might expect from sources like pension and social security. You might also have funds from other sources like savings and investment accounts, wages, etc. 

There is a rule of thumb you can engage in making your asset last you through the golden years. It involves spending 4% of your portfolio in retirement. With this, someone with $2 million will comfortably spend $80,000 per year after retirement. When you include this with other savings – pension and social security, estimate if it can support you for retirement. 

  1. Estimate Future Medical Expenses

For people who retire at age 65 and above, the majority of healthcare costs will be consumed by Medicare. However, to take care of non-routine health care costs, consider supplemental coverage that could rise as you grow older. Also, Medicare does not cover long term care costs. 

To keep your retirement nest egg secure, aim for long term care insurance. It should help with expenses like home health needs. Buying coverage now is a good idea as the premium will be cheaper than waiting for a couple more years. 

For anyone with HSA, it is a good idea to put in the maximum contribution amount. The funds would enjoy tax advantage though there might be penalties and income tax if the funds were not directed to qualified medical expenses. 

  1. Plan Your Place to live

Your retirement place or state can have a significant effect on your expenses. For instance, you might sell your house in an expensive location and migrate to a low-cost home in a place with low taxes. You will not have to pay much, reducing your income for a series of other priorities.

If selling your home seems too big of a step, you can consider moving to a small home that makes financial sense.