Getting ready to retire

Follow these steps to move toward retirement

Instructions: Click each action step to learn more.

Reduce your debt

Many experts recommend that you pay down your major debts such as home mortgages, college loans, high-interest credit cards, and other significant cash-flow drains, as quickly as you can. By paying down your debts, you can potentially lessen the amount of money you’ll need each month during retirement.

Build your savings

Set up regular, automatic deposits to savings from your paycheck, checking account or both. By making it convenient, you’ll save regularly and be less likely to spend the money instead. It’s important to have savings in case of unexpected expenses or an emergency. A good rule of thumb is to save at least three to six months’ worth of expenses in an account that can be easily accessed without penalties.
The sooner you start saving for retirement, the more time your money has the potential to grow and the harder your money works for you. Even if you can only set aside a little each month, starting early could help you to take advantage of the potential of compounding. And even if you didn’t start early, it pays to start now. Contributing regularly is key.
A happy couple and their daughter walking on a beach.

Contribute to a plan

Contributing to a retirement plan can help you to save more, save more often, and start saving now to give your money more time to potentially grow. Consult with your employer and a retirement planning expert to discuss what retirement plan options are available to you.
Remember: Your 401(k) and traditional Thrift Savings Plan (TSP) contributions are taken from your income before it’s taxed. Experiment with how much you contribute. You may be surprised to find that putting a small percentage of your pre-tax income into a 401(k) or traditional TSP has a smaller impact on your paycheck than you might expect.
If you’re over 50 years of age, 401(k) plans, the Thrift Savings Plans, and IRAs offer the option of investing additional catch up contributions.

Manage your investments

As your target retirement date draws closer, you may want to consider reducing the percentage of stocks and increase the percentage of bonds in your portfolio. That’s because the prices of stocks are usually more volatile over the short term, while bonds are more stable and produce a steady source of income.
Also, ask your investment advisor about investments specifically designed for retirement.

Check with Social Security

Visit the Social Security website ( to view your statement online and learn about your potential benefits and options. Make sure your personal information is up-to-date and your wage records are accurate.

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