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Most people look forward to the day when they can finally punch into work for the last time, but not everyone spends enough time thinking about what needs to be done now to make retirement possible and painless when the time finally comes.

According to the Pew Research Center, “between 2008 and 2019, the retired population ages 55 and older grew by about 1 million retirees per year. In the past two years, the ranks of retirees 55 and older have grown by 3.5 million.”

Retirement isn’t something you should start thinking about when you’re only a few years away. It’s something you need to start planning for from the moment you become an adult and enter the workforce.

This article will provide you with an introductory retirement checklist to help you plan and prepare for the golden years of your life.

Choose a Retirement Date

The most important question you need to ask yourself early on in your career is this:

“At what age do I want to enter retirement?”

Knowing the answer to this question will have a big impact on how you work, how you save, and how you spend your money.

A 2018 Gallop survey found that most people in the U.S. predict that they will retire at or around the age of 66. This is a slight increase from the predictions people were making back in the 90s, which put the age at 60.

Interestingly, other survey data from Natixis Investment Managers suggests that the desired age of retirement differs among different generations.

Here’s an excerpt of their findings, published in a CNBC article from January 2022:

“The youngest cohort, Generation Y — ages 25 to 40 — plans to retire at an average age of 59. For Generation X — now 41 to 56 — the average age is 60. Baby boomers — who range from 57 to 75 — indicated they plan to work longer, with an average expected retirement age of 68.”

As soon as you become a working adult, you should have an idea of when you intend to retire.

There are obviously many factors that could impact your decision, such as whether or not you have kids and want to help fund their college education, whether you have elderly parents that will require extra financial support from you as the age, where you live, what kind of industry you work in, and more.

But having a general age or small range is a helpful way to motivate yourself to start making the right financial decisions now.

Understand How Much Money You Need

Once you land on what age you’d like to retire, the next step is figuring out exactly how much money you’ll need to support yourself through the final years of your life.

Not sure how to back into that number? Here’s what Investopedia says most experts recommend when it comes to saving for retirement:

“Most experts say your retirement income should be about 80% of your final pre-retirement annual income. That means if you make $100,000 annually at retirement, you need at least $80,000 per year to have a comfortable lifestyle after leaving the workforce.”

Let’s take this calculation one step further. Let’s assume you decide to retire at the age of 62 when you’re making $100,000 per year. Healthy adults in the U.S. live, on average, until the age of 77. That’s 15 years you’ll spend in retirement. Using the calculation from Investopedia, that means you’ll need at least $1,200,000 to support yourself and live comfortably after you leave the workforce.

That amount of money might seem impossible to some, but the earlier you start saving and planning, the more likely you will be of reaching it by the time you retire.

Commit to Eliminating All Existing Debt

One of the best ways to ensure you have the money you need to support yourself during retirement is to eliminate all your existing debt.

Having a lot of debt makes it incredibly difficult to have any extra money to save or invest throughout your life.

Some types of debt are more unavoidable than others, like a mortgage or a college loan, but debt is debt—it prevents you from having full control over how you spend and invest your money.

One of the most popular methods for working on debt is the Snowball Method, shared often by Dave Ramsey. Here’s how it works, as explained in their blog article on the topic:

“The debt snowball method is a debt-reduction strategy where you pay off debt in order of smallest to largest, gaining momentum as you knock out each remaining balance. When the smallest debt is paid in full, you roll the minimum payment you were making on that debt into the next-smallest debt payment.”

This method is just one of many debt reduction strategies you can find online. Whether you use the Snowball Method or another method like it, the key is to simply start taking action to reduce your debt. Because the earlier you start, the sooner you’ll reach your goal of being free of all debt.

Take a Complete Inventory of Your Assets

Another important step in preparing for retirement involves taking a complete inventory of your existing assets. As you age, you acquire more assets—property, stock options, 401K accounts, savings accounts, insurance policies, and more.

These assets should be taken into consideration as you think about how you’re going to support yourself throughout retirement when you no longer have an income.

Think back to the example we shared earlier—assuming you need roughly $1.2 million to live comfortably during retirement, where is that money going to come from. For most people, it’s not money that lives solely in a savings account. Instead, it’s spread across different assets that you own and can control. Some assets are more liquid than others. Some assets are intended to only be used once you reach a certain age or only when you enter into retirement.

Keeping track of your assets will help you understand where your money is being saved and invested. It will also uncover gaps and opportunities that you can address early on to better prepare yourself for the costs associated with being retired.

Learn How Retirement Benefits Work

To prepare for retirement, you need to understand how retirement benefits work. Social Security is one piece of the equation, but the potential benefits can be significant.

According to the SSA, “on average, retirement beneficiaries receive 40% of their pre-retirement income from Social Security.”

How much money you get through social security benefits depends on how much you earned during the years you worked.

To learn more about retirement benefits provided by the SSA, explore this helpful informational guide prepared by the agency.

Build and Strengthen Your Financial Portfolio

Retirement is a lot easier when you’ve taken time to build and strengthen a diverse financial portfolio throughout your lifetime and especially during the years when you’re earning an income.

The purpose of a financial portfolio is to generate returns that can supplement the benefits you get from your social security benefits.

Your portfolio may include things like:

  • Stocks that pay dividends
  • CDs and bonds that offer steady interest rates
  • Mutual funds and stocks that grow at a faster rate than most
  • 401K and other similar programs
  • Cash and cash equivalents
  • Pension
  • Other investments

The best way to start building a financial portfolio that generates the types of returns you want is to speak with a licensed financial advisor.

Figure Out Health Insurance Needs

Another piece to think about as you get closer to retirement is health insurance. If you plan to retire before the age of 65, you will need to purchase health insurance for yourself and your spouse until Medicare kicks in.

You may find that your employer offers a special group plan for you to take advantage of once you retire, but these programs are becoming much rarer than they used to be.

To be eligible for Medicare benefits, you need to have worked for at least 10 years and paid Medicare taxes during those years.

To learn more about how Medicare works and what your options are, explore

Final Thought: Start Earlier Than You’d Like

When it comes to planning for retirement, you’re better off starting before you’re ready. The older you get, the harder you’ll have to work to save and allocate the amount of money you need to live comfortably during the final years of your life.

While the recommendations in this article are not exhaustive, they will help you start thinking and planning more intentionally for retirement.

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