Plan for Retirement Ten Years Early

Basic Information

Retirement should be a planned event in the lives of senior citizens, but many believe that Social Security will take care of their financial needs.

Retirement planning should start ten years before the anticipated date of retirement, and hopefully, plans will fall into place to make retirement synonymous with financial freedom. Social Security will not provide sufficient income for most Americans, even with paying down debt and saving money for supplemental funds.

Some eating establishments, like McDonald's, consider 55 to qualify for senior citizen coffee. That should be a warning to start the retirement planning process.

Pay Down Debt

A start on retirement planning is to pay off credit cards and car loans, and any other indebtedness that can be eliminated. Once the consumer debts are paid, tackle the mortgage. The road to financial freedom requires owning a place to live.

Build Savings and Eliminate Expenses

Add to a 401(k) or 403(b) as well as a personal savings account. Make regular deposits to these accounts while employed. Sell the extra vehicles or assets collected over the years that cost money for insurance or taxes. Add the sale price and the extra income to a savings account.

Develop a New Skill

Follow a dream for potential supplemental income after retirement by learning a new skill.

Many senior citizens are working online, but many others could work online if they had learned Internet skills at 55. Pursue a passion, follow a fancy, and start early to see if it is profitable.

Adjust Investments

Divide a nest egg into buckets, suggests Jane Bryant Quinn for the AARP in her article "Financially Speaking: Make Your Money Last a Lifetime." The suggested parts are related to when the money will be needed--within five years, six to 10 years, and longer-term money.

Get rid of individual stocks, since they are unpredictable.

Hold on to Current Employment

Employment will increase Social Security and will provide money to save.

You may also have health insurance at work. Older workers have more difficulty finding jobs, and are less likely to find a new position with health insurance benefits, so it is imperative that workers over 55 keep employment at the status quo.

Do some Calculations

Use the retirement estimator provided by the Social Security Administration to project anticipated Social Security retirement benefts.

Keep records of expenses for twelve months to establish a yearly and monthly budget. Subtract the total needed from the Social Security figure to see how much additional money will be necessary, and plan for how you can generate that amount.

Make retirement plans early and retirement can be a pleasure with financial security and freedom. Less indebtedness and fewer retirement years translate to more money available.

No substitute exists for thinking ahead and developing skills for self-employment. A part-time income can change the quality of your retirement life.

Read our other articles on retirement here or check our Retirement Living Guide Series eBooks.