How to Retire: 5 Steps to a Secure Future

Senior couple making retirement plans with adviser
Alexander Raths / Shutterstock.com

This story originally appeared on NewRetirement.

You want to know how to retire. Figuring out the answer to this question can feel overwhelming and sometimes impossible, especially if you are already in your 50s or 60s.

Maybe it has been hard just making ends meet month after month, and now you are faced with creating a plan for the next 20 or 30 years of your life.

There are many unknowns and, perhaps, not quite enough savings.

However, you can do it.

Following is a straightforward plan for how to retire no matter how much you have saved.

1. Figure out what you want to do in retirement

Retired man
Chaay_Tee / Shutterstock.com

The people who are happiest in retirement are those who have a purpose for this phase of their lives.

It is best to retire to do something, not just to escape whatever you’ve been doing to earn money.

Maybe think about your retirement in five-year segments. Consider what you want to be doing and what will be important to you in each segment.

2. Write down a retirement plan

Retired couple with money
szefei / Shutterstock.com

A lot of potential retirees have a “retirement block.” Similar to a writer with writer’s block, many potential retirees just don’t know how to get started planning their future.

The cure for retirement block is the same as writer’s block. Just jot some things down. Want to know how to retire? Start somewhere.

And know that you are probably not going to get a final plan the first time around. In fact, you might feel shocked by how bad your future finances appear.

But don’t worry: There are lots of ways to fix a retirement plan.

Retirement calculators make it easy to get started. Just answer the questions in the calculator.

Don’t be afraid if you put in the wrong information. Whatever you write down the first time is not going to be your ultimate retirement plan. You will probably need to make some major adjustments.

However, be sure to use a reputable and detailed retirement calculator.

Some calculators make a lot of assumptions that may or may not be relevant to you. And many of these tools focus only on how much savings you need for a secure retirement.

Look for a tool that addresses the following factors:

  • Asks about you and your spouse separately.
  • Gets into the details about your debt.
  • Lets you enter information about each individual savings account.
  • Allows you to put in different levels of saving, spending and earning — none of these are going to stay the same throughout retirement.
  • Helps you think through medical and long-term care costs.
  • Allows you to model different scenarios for your savings, housing, spending levels and more.
  • Enables you to save your information so that you can update it later as you make decisions and strengthen your plan.

3. Play with your retirement plan and fix the problems

Older couple planning for retirement
Image Point Fr / Shutterstock.com

Once you have a baseline plan in place, you will begin to see how to start fixing what might be wrong with your plan.

Don’t worry if you don’t have enough savings. Here are just a few of the many other options you have for improving your retirement finances:

Delay your start of Social Security

Starting Social Security benefits at your full retirement age (instead of at 62, the earliest age to start) can sometimes mean more than $100,000 over your lifetime. Delaying longer could mean even more.

Boost your investment plan

Depending on your level of savings, getting a better rate of return, reducing investment fees and improving your tax efficiency can be great ways to ensure a more secure retirement.

Invest in a lifetime annuity

Having adequate income for life is the biggest problem facing most retirees. A lifetime annuity is one way to give yourself the income you need — guaranteed for your (and your spouse’s) life.

Buying an annuity locks up your savings, but can greatly reduce stress. However, there are many pros and cons to lifetime annuities.

Work longer

There are so many benefits to working longer, including social, emotional, intellectual and financial benefits. And it does not have to be nose to the grindstone forever.

There are lots of ways to make work a bigger part of your retirement plan: an extra year at your job, a part-time gig, a sabbatical instead of retirement or starting your own side business. Try out different work scenarios in your retirement plan.

Tap home equity

If you are like most households, your house is your most valuable asset, often exceeding your retirement savings. If you own your home, you can give a serious boost to your retirement plans by downsizing or getting a reverse mortgage.

Get creative

Desperate times call for creative measures. If you are nearing retirement and are short on adequate funding, you may need to start thinking outside of the box.

Getting a roommate, retiring abroad and finding passive income streams are a few ways to get creative to fix your retirement plan problems.

Spend less

Anyone can retire, regardless of their level of income and savings: It is a matter of spending less and making do.

It’s not easy, but some people manage to make retirement work on Social Security alone.

Either by using a retirement calculator or by working with a financial adviser, you should keep playing with your retirement plan. Change the numbers and dates until you have a plan you can live with.

4. Set a retirement date and tell everyone

A retired couple celebrates their freedom at the beach
goodluz / Shutterstock.com

You have documented what you have, plus researched and refined your options. Now it is time to finalize some decisions and commit to your plan. Sharing your ideas for how you will retire will help make it real for you.

Of the many important dates, you will probably want to set an official retirement date for yourself.

Even if you will be easing out of work or getting a retirement job, don’t be shy about celebrating this important milestone in your life. Retirement is a major accomplishment.

Retirement date aside, you will want to take note of all of the important events in your plan: the start of Social Security, when your mortgage is paid off, when it’s time to downsize, when it’s time to start withdrawals from savings, etc.

Be prepared to adjust them as necessary as you progress through retirement.

5. Take the leap of faith

Retired couple
wavebreakmedia / Shutterstock.com

Research shows that people feel a lot of stress and anxiety in the years leading up to retirement. However, they feel better in retirement.

The retirees who went through a rigorous planning process and figured out how to retire expressed the most satisfaction with retirement. However, even those not as prepared found ways to make it work and enjoy this time of their lives.

So, as the saying goes: Jump right in, the water’s fine.

Disclosure: The information you read here is always objective. However, we sometimes receive compensation when you click links within our stories.

Read Next
7 Reasons Not to Move When You Retire
7 Reasons Not to Move When You Retire

Sunny skies and warm breezes sound great. But in reality, you might be better off retiring closer to home.

This Is the Best Age to Buy Long-Term Care Insurance
This Is the Best Age to Buy Long-Term Care Insurance

If you wait too long to apply for coverage, you could be denied. So, when’s the sweet spot to apply?

It’s Worth Paying More for These 7 Things
It’s Worth Paying More for These 7 Things

Sometimes, the difference in quality makes it worthwhile to open your wallet a little wider.

11 Home Upgrades With the Best Payback in 2020
11 Home Upgrades With the Best Payback in 2020

The home remodeling projects that deliver the best bang for the buck tend to have one thing in common.

12 Ways to Never Pay Full Price for Anything
12 Ways to Never Pay Full Price for Anything

Stop paying retail prices. Here are plenty of ways around that.

View this page without ads

Help us produce more money-saving articles and videos by subscribing to a membership.

Get Started

Most Popular
11 Senior Discounts for Anyone Age 55 or Older
11 Senior Discounts for Anyone Age 55 or Older

There is no need to wait until you’re 65 to take advantage of so-called “senior” discounts.

20 Things That Are Actually Worth Stockpiling
20 Things That Are Actually Worth Stockpiling

You don’t need a year’s supply of toilet paper to survive an outbreak, but consider stocking up on these items.

Can a Twice-Divorced Woman Claim Social Security Survivors Benefits?
Can a Twice-Divorced Woman Claim Social Security Survivors Benefits?

Understanding survivors benefits rules is the key to getting the most from your benefit.

9 Things You’ll Never See at Costco Again
9 Things You’ll Never See at Costco Again

The warehouse store offers an enormous selection, but these products aren’t coming back.

These Are the 10 Worst Cars for Depreciation
These Are the 10 Worst Cars for Depreciation

Two types of vehicles are especially likely to see steep plunges in value.

Never Buy These 10 Things With Your Credit Card
Never Buy These 10 Things With Your Credit Card

Credit cards offer many conveniences and protections, but sometimes it’s simply smarter to keep the plastic tucked away.

13 Amazon Purchases That We Are Loving Right Now
13 Amazon Purchases That We Are Loving Right Now

These practical products make everyday life a little easier.

10 Things I Always Buy at Trader Joe’s
10 Things I Always Buy at Trader Joe’s

From snacks to sweets to side dishes, stock your cart with these time-tested favorites on your next TJ’s run.

8 Surprising Household Items You Can Sell for Fast Cash
8 Surprising Household Items You Can Sell for Fast Cash

Sometimes, the humblest household items are worth the most money.

19 High-Paying Jobs You Can Get With a 2-Year Degree
19 High-Paying Jobs You Can Get With a 2-Year Degree

There are easy high-paying majors available in the U.S. — and no bachelor’s degree is required. We’re here to help you find easy degrees that pay well.

Cut These 11 Expenses Now If You Hope to Retire Early
Cut These 11 Expenses Now If You Hope to Retire Early

Like the idea of financial independence? Part of the FIRE equation is cutting costs.

5 Ways Social Security Will Change in 2021
5 Ways Social Security Will Change in 2021

These adjustments will affect both workers and retirees in the new year.

Stop Buying These 19 Things Online
Stop Buying These 19 Things Online

The internet has changed how we shop. But for some things, you’re still better off buying the old-fashioned way.

15 Products You Need — Even If You Didn’t Know It
15 Products You Need — Even If You Didn’t Know It

Discover some must-have products on Amazon that you didn’t even know you were missing.

7 Tips for Building an Emergency Food Supply
7 Tips for Building an Emergency Food Supply

A pandemic or natural disaster could leave you reliant on your existing emergency food supply. Is your pantry well-prepared for emergencies? Knowing what to stock up on for emergencies can be a difficult task and we’re here to help.

3 Ways to Get Microsoft Office for Free
3 Ways to Get Microsoft Office for Free

With a little ingenuity, you can cut Office costs to zero.

These Are the 4 Best Medicare Advantage Plans for 2020
These Are the 4 Best Medicare Advantage Plans for 2020

Medicare Advantage customers themselves rate these plans highest.

8 Things You Should Buy at Restaurant Supply Stores
8 Things You Should Buy at Restaurant Supply Stores

You don’t have to be a chef or a restaurant owner to shop here.

11 Things Retirees Should Always Buy at Costco
11 Things Retirees Should Always Buy at Costco

This leader in bulk shopping is a great place to find discounts in the fixed-income years.

View More Articles

View this page without ads

Help us produce more money-saving articles and videos by subscribing to a membership.

Get Started

Add a Comment

Our Policy: We welcome relevant and respectful comments in order to foster healthy and informative discussions. All other comments may be removed. Comments with links are automatically held for moderation.