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Are You on Track for Retirement? A Checklist

By Seth Kaufman

  • PUBLISHED September 07
  • |
  • 8 MINUTE READ

Sticking to a script in real life isn’t easy, especially when it comes to planning for retirement. Job opportunities, career paths, real estate markets, your health and relationships are not easy to predict. But having goals in place can help guide your financial journey. Here’s a to-do list to help ensure a smooth journey from college graduation to your dream retirement.

1

During Your 20s

Seek Financial Independence—The first goal for any young adult should be financial independence from their parents. That means paying your own bills, rent and debts.

Pay Down Your Student Loans—Start paying down your loans immediately, and if possible, increase your payments to pay them off by the time you’re 30.

Start Saving for Retirement—Open an individual retirement account (IRA), and contribute to a 401(k) plan at work if it’s offered. Money socked away in your 20s will compound and grow for longer than the savings you put away when you’re older.

Build An Emergency Fund—Start a savings account or short-term CD to access money when you need it—for car repairs, job changes, maybe an engagement ring. 

2

During Your 30s

Consider Purchasing a Home—Amassing a down payment for a house requires diligence and discipline, but owning a home is a good way to build wealth.

Start a College Fund—If you’ve started a family, open a 529 savings account for each child and make annual contributions.

Consider Life Insurance—If you’ve got a life partner or kids, having a life insurance policy in place provides peace of mind that if anything happens to you, your loved ones will be taken care of financially.

Make a Will—A will also benefits your survivors if something should happen to you. Plus, you’ll know your property will be distributed according to your wishes.

3

During Your 40s

Consider Disability Insurance—A long-term illness or injury can mean months of lost wages.  This type of policy may be a wise hedge against unforeseen challenges.  

Pay Down Your Mortgage—Depending on the size of your mortgage, adding an extra $100 each month to pay down the principal on your loan can reduce your total number of payments. Use a mortgage payoff calculator to see what you’ll save, and investigate shortening your 30-year loan to 15 years.

Have a Financial Conversation with Your Parents—Talk to your parents about money. If they’re well off, have they made estate plans? Or will they need support from you? Either scenario will affect your fiscal future and require planning.

4

During Your 50s

Prepare for Early Retirement—For many, the older we get, the harder it is to land new work. So start to focus on saving. You should be maxing out 401(k) contributions and IRA deposits.

Start to Downsize—Are the kids out of the house? It may be time to think about selling— especially if the value of your property has increased. You can use the profits to pad your retirement plans.

Revisit Your Plans—If it’s been a while since you made a will, took out life insurance or examined your retirement investment strategy, this is the time to make sure everything is in order. It may also be time to invest in long-term care insurance.

5

During Your 60s

Build a Social Security Strategy—You can take Social Security retirement benefits when you turn 62. But your check will be 25% less than if you wait to take benefits at your full retirement age—66 or 67 depending on when you were born.

Plan for Life After Work—There may be someplace you’ve always dreamed of retiring to. Now’s a good time to visit and see if it’s still the place of your dreams. It’s also a good time to start to put together a budget to make sure your retirement will be as comfortable and stress-free as you’d always hoped. 

Seth Kaufman is a journalist and ghostwriter based in Brooklyn, N.Y. His work has appeared in the New York Times, The New Yorker online and many other publications.

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