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12 Steps to a More Comfortable Retirement

Today’s financial experts will tell you that we’re not saving enough for retirement. With only 32% of Americans being involved in a workplace retirement plan and the average couple having only $5,000 saved for retirement, I agree: there is work to do.

The numbers are dim, indeed. Investment giant Fidelity tells us that a 50 year old should have six times his or her salary saved in a retirement account and a 60 year old should have eight times their salary saved. If you are worried about your retirement situation, there are things you can do to change it, even if you’re getting up there in age.

Take the Steps to Better Your Retirement Now

Although it may seem like an impossible feat, it will be well worth the effort to start making serious changes that can help you better prepare for retirement.

Yes, it will require some work and sacrifice to catch up to where you should be, but your post-retirement self will thank you when you don’t have to live on rice and beans to make it through the month with your budget intact.

The small changes (or potentially larger ones you need to make if you’re over 50) will allow you to live more comfortably than you would on your current retirement savings. So get out a notepad and paper and start making your plan for a better life in retirement.

1. Start by visualizing and making a plan for your post-retirement life.

If you want to better prepare yourself for retirement, a good place to start is by deciding how you want to live in retirement. Yes, we all dream of endless travel and a retirement balance that can never run out, but if you’re late to the game on retirement planning you may have to modify a bit from your “ideal” dream and change it to a “doable” dream.

Recommended Reading: The 5 Years Before You Retire: Retirement Planning When You Need It the Most

Taking all factors into consideration, what is a doable post-retirement monthly income for you, and how can that income help you live the life you want to live? What will be your housing situation? How much will it cost you? What types of hobbies and other fun things do you want to do after you retire?

Once you create your post-retirement life on paper, you can go about making a post-retirement budget so that you have an idea of how much cash you’ll need to live on each month.

Don’t forget to include extra cash for taxes and inflation, and that you’ll need money to repair and replace cars, etc. as you make your plan. Work to create a plan that is realistic given your current savings and what you can save by changing up your current budget. More on that later.

2. Improve your health where needed.

The biggest expense for more retirees is healthcare. Not only are there monthly premiums for insurance and Medicare, there are out-of-pocket costs for copays and medicines as well.

You’ll do yourself a huge favor if you work now on improving your health so that you can help to minimize health care costs in retirement. If you need to lose weight, start doing so (with the help of your doctor) by eating better and implementing a physician-approved exercise program.

Related: Six Health Hacks That Help Us Keep Medical Costs Low

Reduce stress in your life where applicable and learn to cook healthy, whole foods meals. Take measures now that will help you put yourself in a healthier place so that medical costs have a lesser chance of consuming your retirement savings.

Recommended Reading: Younger Next Year: Live Strong, Fit, and Sexy – Until You’re 80 and Beyond

I know firsthand that choosing healthy foods over yummy treats isn’t easy, but it is worth the effort as you find yourself living a healthier life and breaking the hold that a lack of discipline in food and lifestyle has on a person.

Related: How a Family of Six Keeps Healthcare Costs Low

If you can avoid many of the lifestyle related diseases that are so prevalent among adults today, you can help preserve your retirement savings for fun stuff like travel.

3. Start planning your post-retirement housing transition now

Do you know where you are going to live after you retire? Will you stay in your current home? Sell it for a condo or townhouse? Rent at a 55+ rental apartment complex? Move to a budget friendly area like Mississippi or Tennessee? Live with your adult children?

What are your post-retirement living priorities? Is it more important to be close to kids and grandkids or to be in a warmer climate? Start doing your research now and deciding what you can afford and where you’ll get the most out of retirement life. Then choose a housing option that fits in with your plan.

Everyone’s answer to post-retirement living will likely be different. I have a dear friend who lives with her son and his family in their basement, which is set up as a mother-in-law apartment with a small kitchen and apartment-sized laundry facilities.

My mom and her husband decided to sell their small house and rent in a 55+ apartment complex. My dad and my mother-in-law have both decided -at least for now – to stay in their homes.

Recommended Reading: How to Retire Happy, Wild, and Free: Retirement Wisdom That You Won’t Get from Your Financial Advisor

Where you choose to live post-retirement should depend on what type of life you want to live after you retire and what type of housing situation is most affordable for you. The cost of your housing has to fit in with a budget that will make sure your retirement funds last for the long haul.

4. Work to find waste in your spending

Yep, time to start tracking your spending. I realize this isn’t always a fun activity. Discipline is a hard goal to master, but you’ll be glad you did when you realize that your retirement won’t leave you destitute.

Find out where every dime of your money goes each month, and then work to eliminate wasteful spending. This doesn’t mean you can’t have any fun anymore. Instead, work to set aside a certain amount of cash each month for splurges and entertainment. Just make sure that your splurge money fund is decided on AFTER you’ve ramped up your retirement savings.

Yep, savings first, fun second. That might mean you’ve got to find ways to entertain yourself for free or cheap so you can have more cash to put toward retirement. Or it might mean you need to start finding ways you can avoid extras like salon trips in favor of DIY beauty treatments.

Or you might need to cut down on restaurant visits and start making restaurant meals at home or meeting your friends for coffee instead. Although these changes might be difficult at first, you’ll likely get used to them and begin wondering – as we did – why on earth you wasted your money on that stuff for so long when you could have been using it to reach the seemingly unattainable goals of getting out of debt and building wealth.

5. Decide which retirement investment vehicles are best for you

If you need to increase your retirement savings, you can do it in a number of ways. You can start by contributing to your 401(k) plan if your employer offers one. At the very least, contribute up to the employer match amount. If you can afford more or are behind on your retirement savings, consider contributing more.

Recommended Reading: How to Make Your Money Last: The Indispensable Retirement Guide

You can also contribute to a Roth or Traditional IRA. Those over age 50 can contribute up to $6,500 per year. IRA contributions can be put in a number of different types of investments from mutual funds to CDs to REITs. Talk to a trustworthy investment expert for more information on how you should invest IRA monies. My personal opinion is to avoid annuities like the plague, however.

6. Pay your debt off ASAP

If you are carrying consumer or mortgage debt, you’d do yourself a favor to rid yourself of it ASAP.

Debt can be a real retirement killer. Every debt payment you have equals money that cannot be contributed toward retirement savings or used to cover basic living or luxury expenses. And the compound interest you’ll pay on debt will crush your finances.

If you’re carrying any debt at all, make a plan to get it paid off as soon as possible and free your money up for things that will build up your life instead of keep you in bondage.

7. Consider when you’ll start drawing on Social Security

Consider it, but don’t count on it. Given our government’s oodles of debt, it would be wise to not include Social Security payments as a part of your retirement plan. However, you can assess when the best time start drawing on it is for you so that if it’s available you’ll know when you’ll start receiving the income.

Plan on Social Security as a bonus and not an absolute, and it will make your retirement even more comfortable.

8. Start considering multiple streams of income.

Multiple streams of income – even in retirement – can really help provide for an added financial cushion that might make the difference between scraping by and living comfortably. There are specific rules for earning income while collecting Social Security benefits, so you might want to take that into account.

However, even a smaller collection of income streams, say, $10,000 a year, can really help cover expenses and extras while not affecting any Social Security income you may be receiving.

For ideas on different ways you can earn money in retirement, check out this article on 50 Great Side Hustles.

9. Build up your emergency fund

Yes, even in retirement it’s smart to have an emergency fund. Six to twelve months’ worth of expenses is ideal if you can swing it. Even as you are maxing out retirement contributions, start putting at least a little bit of money into an emergency fund each month. It may take a while to get to that six month mark, but you’ll get there.

10. Start maximizing retirement contributions as much as you can

I realize I’m asking you to do a lot here:

  • Pay off debt
  • Build an emergency fund
  • Maximize retirement contributions

While it may seem like a daunting list, it’s important to diversify your surplus income in a way that covers all three of these goals. If you’re seriously behind on retirement saving, that goal should have top priority, while you work to put a bit extra toward debt and then your emergency fund at the same time.

You’ll have to work out a plan for your surplus monthly income that works for you. For example, if you’re seriously behind on retirement savings, and you have $100 in surplus income each month, you might want to put $70 extra in retirement savings, $20 extra toward debt payoff and $10 into an emergency fund each month.

While it may seem a bit fruitless to divide your efforts, all three aspects of preparing for retirement are important so it’s wise to consider working on all three goals in some ways.

After you’ve decided how much surplus income you have and what you’ll do with it, do your best to maximize retirement contributions where you can. Contribute what you can afford in pre-tax dollars to your 401(k) if you have one, and any available monies to an IRA if they are available as well.

Kick it big time in the savings department, knowing that the sacrifices you’re making to do so will result in a much more peaceful post-retirement life.

11. Develop an investing risk strategy

Your retirement investing strategy will vary in its risk levels based on your risk tolerance as well as your age and number of years until retirement.

Talk with a trusted professional about how you can develop a risk strategy for investing that works for your individual situation. If you don’t already have a financial advisor, ask family and friends for referrals AND do research on your own regarding risk strategy so that you have an idea of what the best plan is for you.

12. Focus on the result, not the interim

It’s easy when working to reach a lofty financial goal to be focused on the “now” and all of the sacrifices you are making to reach your goals. Don’t allow yourself to be discouraged by what you’re giving up now.

Instead, visualize your future and how nice it will be to be able to live your retired life in a way that is comfortable and allows you to live out at least some of your post-retirement dreams. In other words, persevere.

You’ve come a long way, baby. Now it’s time to prepare to cross that finish line into a comfortable and enjoyable retirement.








    • Laurie says:

      Yes!!! I agree. Retirement prep doesn’t have to be a comprehensive plan, but it does have to be a plan of some sorts. 🙂

  1. I agree so much, especially about health. How can you enjoy your retirement if you’re sickly? That’s hardly a retirement! Once my dad asked a retiring coworker what he would change if he could go back in time. He said two things: first, he would have gone to Hawaii when he was younger so he wouldn’t be so wrinkly on the beach; and two, he wished he’d taken better care of his teeth. You can always make more money, but you can’t make more time and health.

    • Laurie says:

      “You can always make more money but you can’t make more time and health.” Great comment. Having dozens of family members suffering from diabetes, heart disease, etc., I see the terrible ramifications of not caring for your health, and it’s not pretty. 🙁

  2. I like that you started with planning post-retirement life. This is a key step that most people seem to miss in their rush to exit the working world. You can’t be successful and happy if you don’t know what you are retiring to.

    • Laurie says:

      Yes!!! SO important. Most people are too busy running away to have given thought about what they want to run towards in retirement. It takes some time to make retirement successful, because it’s not just about having enough cash.

  3. Brian says:

    #3 is a tough one for us right now. We know we want to relocate, but just not sure where. We want to better understand where our three children land to be able to make visits more convenient for everyone. We continue to save and build wealth to be in a good position to make the best decision when we are ready.

    • Laurie says:

      Yeah, the kids’ locations will definitely be important. Hopefully they’ll all settle in and around a nice warm, southern area. 🙂

  4. Health is a big one for me. I’ve been reading lately that a sedentary lifestyle is horrible and I have a sedentary job with a long commute where I’m driving. I don’t exercise as much as I should or at all really and I should probably improve my diet. I like to think I’m still young so I have time to work on it…but I really need to think about it. As my 4 year old reminds me often when he sees my white hairs…”you have white hair because you’re getting old!” =) And as for relocation, leaving NYC would definitely be a good way to ensure that we can stretch our money a lot further. No plans to leave but who knows what the future holds.

    • Laurie says:

      LOL!!! Kids are great, aren’t they?? Yeah, I’ve really started to make exercise (and eating well) a priority since I turned 50 this summer. The “getting old” thing is freaky. Makes you realize you’re not invincible. 🙂

  5. David Brennan says:

    I do not believe in the x times your income method for retirement funding. I favor a much simpler approach.

    For the 15 years before I retired, I kept a budget on a spreadsheet with three columns, Regular, Crash & Retirement. Crash was for losing a job or something like it. For crash & retirement, the amounts were sometimes the same as regular, like mortgage, house tax. Many of the items were less for crash and retirement, like auto, eating out, etc.

    Using the monthly totals for the three budgets allowed me to know what I should have in an emergency fund and how much I would need for retirement. Since this spreadsheet also included income for each category, I could see what the expected income & expenses were in retirement.

    My transition into retirement budget-wise was not difficult, because I knew what to expect. We still keep the same three columns in the budget. Regular means current budget. Crash means maybe social security gets reduced. Retirement means my wife retires from her part-time work or another stream of income gets shutdown.

    • Laurie says:

      David, thank you for sharing a wise tip!!! Would love to feature a guest post on this if you have the time/desire to write one up. Smart plan!!!!!

  6. I’m glad you started with visualizing. I find that so many people try to make plans before they’ve taken the time to understand the goal. What’s the dream look like? Hard to know what it will cost, and take to get there, if it isn’t even clear. Visualizing is a powerful first step that everyone should take!

    • Laurie says:

      Yes!!! Everyone’s post-retirement visions are so different. Some want to travel the world, others prefer to stay close to home. And each of these plans will require a different amount of cash. I think people just focus on the fact that they won’t have to work and don’t bother with creating their post-retirement life before they pull the plug on the job.

  7. Laurie, great list, and I’d like to add some thoughts on #2 (Health). I’ve been a runner for 25 years, but have grown tired of it in the past year. Ironically, I just completed “Younger Next Year” and am pleased to know that 45 mins of “moderate” exercise (think brisk walk), 6x per week, is more than sufficient for aging well. That realization has made my life better, and I’m striving the do SOMETHING 6 days / week. I’m also eating a bit better (just changed to Shredded Wheat, thanks to the book).

    Like FI, small steps, over time, can make the difference. Whether it’s $$, habits, or fitness, start small and be consistent! Thanks for a great post.

    • Laurie says:

      Glad you enjoyed the book!! “Life FI, small steps, over time, can make the difference……start small and be consistent.” SO true. We did this with our emergency savings. We started small (1% of our take home pay b/c money was SUPER tight and we were in massive debt) and just slowly inched it up. And guess what: it’s adding up! Woohoo! Wise advice, my friend.

  8. Glad to see health so high on the list. Having a health life style not only lowers your expenses but it helps you tackle the other steps too. Eating right and getting regular exercise will give you the energy to tackle those other challenges.

    Sometimes its simple changes. I’m not a gym guy. like to build exercise into my daily routine. I bike to work which gives me 50 min of exercise 5 days a week. I also garden which is quite relaxing (plus it helps with the health eating too!).

    • Laurie says:

      It IS the simple changes – you are right!!! I’ve been doing a semi-daily walk with a neighbor friend, and am amazed at the difference it’s made in my health!

      • That’s awesome. They say walking is relaxing too. Given all the distractions we have (phones, computers, tv etc etc) I can definitely see how walking can help you unplug and relax (unless you can walk and stare at your phone at the same time!).

        • Laurie says:

          I’ve found it is relaxing. Whether with a friend and chatting the whole time, or by yourself and clearing your head, it’s wonderful. Thanks, Owen!!

  9. Mrs. Groovy says:

    Having no debt is extremely important, especially if you’re retiring at an age and/or with skills where it would be hard to jump back into the job market.

    I don’t know if “Younger Next Year” mentions this but in addition to working out your heart, it’s important to do resistance training for muscle and bone mass. My 89 yr old aunt could live another 10 years based on her heart and lung health. But she can’t walk or do anything for herself. Use it or lose it.

    Great, thought provoking stuff!

    • Laurie says:

      Yes, resistance training is powerful!! Thanks for mentioning that, Mrs. G. I make it a part of my regular routine – so important!

  10. katscratch says:

    Until very recently, visualizing post-retirement life wasn’t something my mind could handle. I’m so glad to have found blogs like yours that have given me inspiration and a grand vision for what will be!

    I think I’m just going to keep working straight down your list! Great post!

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