How to Plan for Retirement

by Contributor ; Updated July 27, 2017
Plan for Retirement

Items you will need

  • Financial calculator
  • Personal financial software
  • Brokerage accounts

How to Plan for Retirement. It may seem as if retirement is in the distant future, but it's never too early to start planning to enjoy it--and finance it.

Step 1

Start planning for retirement early. Think about how you want to live--and where. Calculate how much money you think that you will need.

Step 2

Plan for the possibility of living longer than you now expect. Include the possibility of being on a fixed income for as long as 20 or 30 years.

Step 3

Create a financial plan either with a certified financial planner or by using computer software like Intuit's Quicken. (Remember to include your Social Security benefits.) This will help you figure out how much money you should invest for retirement on a regular basis.

Step 4

Contribute funds weekly, monthly or annually to your employer's 401(k) plan or your SEP-IRA. Be sure to consider a Roth IRA or a traditional IRA if you qualify. See 146 'Select a Retirement Account.'

Step 5

Pay off major debts, such as home mortgages, college loans and other significant cash-flow drains, as quickly as you can.

Step 6

As you approach retirement, you may want to reduce your discretionary expenses and attempt to live on a fixed income. Adjust your asset allocation based on your spending patterns. If you are spending more than your assets are earning, you may have to lower spending and take more risks in the hope of increasing your returns. Ask for advice.


  • Allocate retirement investment money to a mixture of stocks, bonds and cash according to your research and the advice of investment counselors. Know your tolerance for risk taking and plan accordingly. If you can't pay off your debt, try to put some toward the debt and some toward a savings plan. You may want to try reducing credit card and high-interest debt by taking out a low-interest loan or low-interest line of credit.


  • Consider purchasing long-term care insurance if you are concerned about losing your assets if you need nursing-home care.