6 Keys to Creating Your Retirement Game Plan
You are more responsible for your retirement preparation than past generations.

The story of retirement is changing. The rules are vastly different from the days of our parents and grandparents. The normal path to retirement then included a steady pension from the employer, a stable Social Security check and maybe a little bit of savings.
For most people, those days are over. Here are six keys for creating a retirement game plan in today's changing world:
1. Stay out of debt.
If you're nearing retirement, chances are that your parents went through the Great Depression. They learned thriftiness and appreciated the things they could call their own. They saved their pennies; dollars had a big significance. Baby boomers aren't as good at saving as their folks were. If you do like to spend money, then focus on paying cash! If you don't have the money today, learn to save for purchases. Two, three or four months later, you'll have the cash. Five to 10 years from retirement is not the time to be taking on new debt.

Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
2. If you're 15 years from retirement—or less—focus on paying down any mortgages you hold.
Your mortgage can be one of the largest liabilities you hold in retirement. When the paychecks stop, the entire dynamic changes. We don't know which direction the economy could turn, and having your name on that deed can help you sleep peacefully at night.
3. Save enough for retirement.
Many people don't know how much to save for retirement—or even where to begin. Here's a handy guideline for milestones to shoot for:
- At age 35, have one year's worth of your current salary saved.
- At age 45, have three years' salary saved.
- At age 55, have five years' salary saved.
- At age 67(at retirement), have eight to 11 times your current annual salary saved.
4. Stick to a rigorous budget.
Now let's talk about a revolutionary concept that many in their highest-earning years are unfamiliar with: the budget. Nail down where you are spending money as early as possible. Next, make sure your pre- and post-retirement budget includes not just your mortgage and utilities, but also food, fun, travel, taxes, insurance, etc. Unless your retirement objective is to eat ramen and watch Three's Company reruns, the sooner you can come to reality with what you will and won't need, the less painful this transition into 30 years of unemployment (retirement) will be.
5. Check your plan for risk tolerance.
Whether you need $250,000 or $2.5 million to retire, the sooner you have a written income plan in place, the sooner you can adjust your asset allocations in your portfolio to account for your risk tolerance. Once you've identified the number you need to retire confidently, and are approaching that day, reconsider your exposure. Now that risk is a liability, you'll want to consider getting rid of as much of it as possible. The years you once had to recover from market downturns are over. Protecting yourself is paramount to helping ensure you hit your retirement number on time.
6. Maintain a diversified portfolio.
Remember the three most important words in retirement: income, income, income. Gone are the days of retiring with a pension. Most retirees will face an income shortfall at some point in their retirements. You don't want to find yourself in a position where your monthly income is tied to sleeping bank rates or the stock market's volatility. Do your due diligence when walking into the world of purchasing income. Be sure to set your expectations on your objective.
Note: An annuity is not an investment. It is actually an insurance contract that essentially transfers the risk of longevity from the individual to an insurance company. Annuities are insurance products that may be subject to restrictions, surrender charges, holding periods or early withdrawal fees, which vary by carrier. Riders may include surrender charges, longer surrender periods, lower caps or other restrictions. Annuities are not bank or FDIC insured. When considering true diversification, an annuity should act only as a piece of your retirement puzzle.
The tools needed for accumulating retirement income have definitely changed from our grandparents' era. However, the definition of retiring will remain the same for generations to come:
Retirement should be waking up in the morning without money concerns. You've worked hard your whole life. Your retirement should be about focusing on your family, friends and hobbies. The ultimate goal is to achieve financial independence, so you can spend your money with confidence and be thankful for the things you have.
Steve Post contributed to this article.
Investment advisory services and insurance services are offered through REAP Financial Group, LLC a Registered Investment Advisor in the state of Texas.
Get Kiplinger Today newsletter — free
Profit and prosper with the best of Kiplinger's advice on investing, taxes, retirement, personal finance and much more. Delivered daily. Enter your email in the box and click Sign Me Up.
Chris Heerlein, author of "Money Won't Buy Happiness - But Time to Find It," is an Investment Adviser Representative and partner at REAP Financial LLC.
-
‘Are You Better Off Than You Were 71 Days Ago?’ Cory Booker Marathon Senate Speech Highlights Tax Debate
Tax Policy A speech protesting Trump’s policies, including tax plans, breaks U.S. Senate records.
By Kelley R. Taylor Published
-
Stock Market Today: Stocks Are Mixed Before Liberation Day
Markets are getting into the freewheeling rhythm of a second Trump administration.
By David Dittman Published
-
Winning Strategies for Financial Advisers as Clients' Lives Evolve
How can the wealth management industry help make life transitions easier for the adviser and the client?
By David Conti, CPRC Published
-
How Advisers Can Establish Relationships With HNW Prospects
These strategies can help to build influence with high-net-worth individuals, who are often looking to an adviser for insight rather than solutions.
By Jeremy Green, CFP®, CTFA, CLU®, CEBS®, AEP®, EA, MSFS Published
-
The Three Biggest Fears Keeping Retirees Up at Night
Here are the steps you can take to put those fears to rest and retire with confidence so you can relax and enjoy the life you've planned.
By Pam Krueger Published
-
What Can a Donor-Advised Fund Do for You? (A Lot)
DAFs and private foundations go about helping charities (and those who donate) in different ways. Each comes with its own benefits and restrictions to navigate.
By Julia Chu Published
-
Estate Planning When You Have International Assets
Estate planning gets tricky when you have assets and/or beneficiaries outside the U.S. To avoid costly inheritance mistakes, it pays to understand the basics.
By Kelsey M. Simasko, Esq. Published
-
Three Essential Estate Planning Steps to Protect Your Nest Egg
After dedicating years to building your wealth and securing your future, make sure your assets are protected and your loved ones are provided for in the future.
By Nicole Farbo, CFP® Published
-
Is Chasing the American Dream Ruining Your Financial Life?
Too many people focus on visible affluence as a marker of success. Here's how to avoid succumbing to the pressure and driving yourself into debt.
By Anthony Martin Published
-
Retiring With a Pension? Four Things to Know
The road to a secure retirement is slightly more intricate for people with pensions. Here are four key issues to consider to make the most out of yours.
By Joe F. Schmitz Jr., CFP®, ChFC® Published