5 Steps to Building a Retirement Plan

By Brent Meyer — SafeMoney.com Founder & Editor Reviewed by Licensed Financial Professionals  |  SafeMoney.com — Trusted Since 2011  |  Updated Regularly Quick Answer: Learn 5 essential steps for effective retirement planning. Secure your future with safe money alternatives. Start planning today with SafeMoney.com! As we approach retirement, we face many decisions. Many of these decision-points revolve around future financial life. Retirement income planning – or creating a plan to cover expenses and retirement uncertainty – is an essential step. But everyone has different income needs, and they vary in their readiness for retirement. Plus today’s retirement landscape is far different than what our parents and grandparents dealt with. In the past, a steady pension from an employer, dependable income from Social Security, and a small fund of retirement savings was standard fare. Now those days are largely a distant memory for most Americans. Even with retirement planning being more of a personal responsibility, there are measures you can take to achieve a financially confident future. Here’s a look at five effective steps to building a solid game plan for your retirement lifetime. Five Steps for Retirement Financial Security 1. Avoiding debt . As Americans approach or enter into retirement, thriftiness becomes more important. If you’re nearing this stage, consider avoiding new debt. Taking on debt while you’re in the “retirement red zone” – or 10 years before you retire and 10 years into retirement – can be a costly mistake . New liabilities will put more pressure on your budget, diluting savings that could be paid toward other needs. Baby boomers tend to not be thrifty as their parents were, so be self-critical. Say you’re thinking about buying something. It’s advisable to pay cash, and if you don’t have the money now, consider delaying the purchase until you do have the money. 2. Considering wiping out existing liabilities – especially the mortgage . If you’re around 10-15 years or less away from retirement, now is a good time to pay off existing debt. That especially goes for the mortgage. According to the most recent data from the U.S. Bureau of Labor Statistics, housing costs were the greatest expense for retired households in 2014 – inclusive of mortgage payments. Once you’ve left the workforce, the paychecks for your employment cease. Now you’re living off savings that you’ve put aside over a lifetime. Getting rid of debt now