6 Things To Do Now If You're 10 Years From Retirement, According To An Expert

After decades of hard work, retirement is finally in sight. But with all the responsibilities, tasks and work deadlines, planning for retirement can easily fall off your priority list.

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However, if you want to ensure that your transition from work to retirement is smooth and worry-free, now is the time to take charge of your financial future.

What steps should you take to prepare for retirement over the next ten years? How can you strengthen your financial position? Keep reading as we help you answer these questions and more. Also discover why talking to a financial advisor before you retire is an important step.

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If you are less than ten years away from leaving the workforce, it is crucial to start planning and not just dreaming. So take the time to think about how you want to spend your retirement days.

Are you planning to explore the world? Are there any creative passions you would like to pursue? How much will this cost you? Try to be as specific as possible.

But retirement isn't just about having fun. You also need to consider your health goals and long-term care.

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After you have a clear idea of what you want your retirement to look like, spend some time creating a realistic monthly budget. To do this, you need to research how much you need for housing, healthcare, food and hobbies, and also take inflation into account.

At the same time, you should start developing your retirement income plan. Write down all possible sources of income, such as Social Security, annuity and all your retirement savings. If you plan to work a part-time job or receive additional income from rental properties, make a note of this as well.

Here's a handy tool to estimate your Social Security benefits.

“Even if you're still ten years away from retirement, it's not too early to start developing a retirement income plan,” says Chris Urban, CFP®, RICP®, founder of Discovery Wealth Planning. “You need to take the time to learn what income generation choices you have so you can retire with ease and confidence. Consider your sources of guaranteed income, such as pensions and/or Social Security, as well as investment and retirement accounts that you can draw on to support your lifestyle in retirement. If you come up with a plan you feel comfortable with, perhaps even a few years before you retire, you can spend money with confidence when you stop earning a paycheck.”

As you approach retirement, you'll need to change the way you divide your assets. It's a completely different experience for your life and money. Some experts believe that your investments should become more conservative as you age, while others note that it's crucial to earn returns that can keep up with inflation (or better yet, get ahead!).

While there is no one-size-fits-all approach to asset allocation, there are ways you can find a strategy that works for your specific needs.

After you determine how much money you need and how much reliable income you will have from sources other than your savings, you need to calculate the difference between the two numbers. Think carefully about the costs you may be able to waive.

Money that you need immediately should be kept in cash. You can keep the money you will need in a few years in bonds. Money that you do not need quickly can be used in shares.

“Take a close look at the distribution of your household assets across all your retirement and investment accounts and start positioning the accounts appropriately based on your short-, medium- and long-term goals,” Urban said. “Often this results in a combination of safer assets such as cash, CDs, etc., as well as stocks, bonds, alternatives, real estate and more.”

Debt payments can quickly drain your retirement savings. Even if you have an investment account that yields 8% annually, it won't do you much good if you have credit card debt that costs 19%. For this reason, it is important to pay off your high-interest debt as quickly as possible. The sooner you are debt-free, the more income you can allocate to your retirement accounts.

Did you know that people aged 50 or older can contribute more to their retirement accounts? That's right. Many employers offer 401(k) plans that include catch-up contributions. This means that you can put aside an extra €7,500 per year. For an IRA, you can contribute an additional $1,000 annually.

If you maximize these contributions, you will significantly increase your retirement nest egg. This means less stress about your financial health.

A 2021 Fidelity Investments survey found that finances and retirement planning are difficult topics for many married couples. Surprisingly, some couples disagree on how they want to spend their retirement days. But if you want the transition to succeed, you have to talk about this topic, no matter how uncomfortable it is.

What are we going to do when we retire? What do we want to prioritize? What will it take before we can afford it? These are all important questions that you should discuss together.

Ideally, you should plan your retirement when you have just finished college. Realistic? It's not the way it always goes.

But even if you've struggled to build a sizable retirement fund, it's not too late to start. Ten years may seem far away, but time flies. Remember, planning for retirement is a marathon, not a sprint. While you still have the opportunity, it's important to set clear goals, maximize your retirement contributions, and pay off as much debt as possible.

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This article originally appeared on GOBankingRates.com: 6 Things You Can Do Now If You're 10 Years From Retirement, According to an Expert

6 things to do now if you're 10 years from retirement, according to an expert