Preparing for retirement means taking practical steps now to strengthen your finances and plan for your life after work. Whether that’s several years down the road or just around the corner, reviewing your savings, expenses, debt, Social Security, and health care needs now can help you feel more confident about the future.

These nine retirement planning steps can help you understand where you stand, identify possible gaps, and build a roadmap for a more financially secure retirement.

Checklist: 9 Steps to Retirement Planning

How can I plan for retirement?

Below are nine crucial financial tips to consider when you’re getting ready to leave the workforce.

1. Estimate your retirement needs 

Figure out how much income you’ll need each month to maintain your lifestyle in retirement. According to the Social Security Administration, you should aim to replace about 70%-80% of your pre-retirement income each year (including investments, Social Security benefits, and personal savings) to live comfortably. 

This can provide a useful starting point, but your actual needs will depend on your expenses, lifestyle, health, and retirement goals.

• Start by adding up expected costs like housing, food, transportation, health care, taxes, and personal spending. Then compare that amount with the income you expect from Social Security, pensions, savings, investments, and other sources. This can help you identify any gaps and set a realistic retirement savings goal.
• Use a retirement calculator to estimate how much you may need to save. Enter information like your current income, age, existing savings, monthly contributions, and expected retirement age. Some calculators also account for inflation and estimated investment growth. Keep in mind your retirement savings needs also depend on the cost of living and where you plan to retire.
• Compare the amount you’re projected to have with the amount you may need. If there’s a gap, use it to set a realistic monthly or yearly savings goal. Remember that a calculator provides only an estimate, so revisit and adjust your goal regularly as your finances and retirement plans change. 

How much should you save for retirement during your working years? 

One common rule of thumb is to save 10 times your annual income by age 67. Another strategy is to save least 15% of your pre-tax income annually, including any employer match. 

Get tips on how to make your retirement savings last.

Learn how you can turn your retirement savings into a steady paycheck.

2. Create a retirement budget 

Retirement doesn’t mean you have to stop saving. But your post-retirement budget will look different from the budget you're following now. For instance, if you currently commute to work, your fuel and other transportation costs may decrease after you retire. 

Start by tracking your monthly spending so you can see where your money is going. Once you know your spending habits, look for small, realistic ways to cut everyday costs—like canceling unused subscriptions, planning meals, comparing insurance rates, and signing up for benefits you may be eligible for. Be sure to include ongoing expenses such as car insurance, maintenance, and health insurance premiums in your retirement budget.

Find practical tips for creating and following a budget.

3. Use your workplace retirement plan

A workplace retirement plan, like a 401(k) or 403(b), makes it easier to save through automatic paycheck contributions. What’s more, your employer may also match part of what you contribute, which can help your savings multiply faster. Depending on the plan, you may also receive tax benefits. If you’re age 50 or older, take advantage of catch-up contributions that allow you to save more in certain retirement accounts. Adults age 60 to 63 may qualify for a higher catch-up contribution limit.

Not contributing money into a 401 (k) account is a financial blunder. If your employer provides you with a retirement fund, you should make the most of it.

4. Make a plan to reduce debt

If you've built up a lot of credit card debt or other financial obligations, you’re not alone. About 41% of households headed by someone between the ages of 65-74 carry credit card debt—up from 27% in 1989, according to data from the Federal Reserve.²

Create a plan to start paying these debts off now. Make sure you refrain from using retirement savings to pay off your obligations, and try not to take on any new debt at this time. If you're struggling to pay off your credit cards, consider credit counseling services. A credit counselor can provide expert guidance and may be able to help you create a debt management plan to navigate your way out of debt. 

See NCOA’s guide to paying off credit card debt.

5. Build an emergency fund 

Unexpected expenses can put a big dent in your retirement savings. According to the Nationwide 2026 Financial Growth & Protection Index research, 45% of American adults surveyed had to dip into savings to cover their essential expenses.1 That’s why it’s critical to build a robust emergency fund. 

An emergency fund is money you set aside for unexpected costs, like a medical bill or urgent home repair. Keeping these funds in a separate, easy-to-access savings account can help you handle emergencies without using your credit cards or retirement savings. A common goal for an emergency fund is saving enough to cover three to six months of basic expenses. If that feels out of reach, start with $500 or $1,000 and add to it over time.

6. Review your investments

As you get nearer to retirement, revisit your investments to make sure they still fit your goals, timeline, income needs, and personal comfort with risk. You may need to adjust your blend of investments to balance growth with protection from major losses. An experienced financial professional can help you evaluate your portfolio and make informed decisions.

Questions to ask about your investments include:

• Does my investment mix still fit my retirement goals?
• Am I taking too much or too little risk?
• Is my portfolio properly diversified?
• What returns might I reasonably expect?
• What fees am I paying?
• How easily can I access my money?
• Could withdrawals trigger taxes or penalties?

7. Plan when to claim Social Security 

When is the perfect time to start withdrawing Social Security benefits? You can begin receiving Social Security benefits at 62. But if you can delay drawing these benefits to full retirement age (FRA), you can receive a larger monthly check for the remainder of your lifetime. Otherwise, claiming benefits at the earliest age of 62 could reduce your benefit by up to 30%.

 Jen Teague, Director for Health Coverage and Benefits, explained the importance of this decision: “The age you choose to claim your Social Security benefits is one of the most important financial decisions you’ll make as you transition out of the workforce. That timing directly impacts how much you receive each month, and over the course of your retirement.” 

Learn more about how timing affects your Social Security benefits.

8. Review your insurance policies

Take a good look at all of your insurance policies regularly to make sure the coverage still fits your needs and budget and that you’re not paying for coverage you don’t need. For example, if you drive less in retirement, ask your insurer if you qualify for a low-mileage discount. If you have an older vehicle, compare its value with the cost of collision and comprehensive coverage before deciding whether to keep these coverages. Likewise, if you no longer have dependents who rely on your income, you may not need as much life insurance coverage.

It’s worth taking the time to right-size your insurance policies in retirement—it could save you significant money each year.

9. Get professional guidance

Retirement planning involves a lot of decisions, from claiming Social Security to budgeting for health care. A financial expert can help you make decisions that support a financially secure future. Research from the Nationwide Financial Growth & Protection Index found that 74% of Americans would be more likely to work with a financial professional who could help protect them financially.¹

A qualified financial professional can help you: 

• Estimate how much monthly income you’ll need in retirement. 
• Make sure you have reliable income to cover basic expenses. 
• Decide the right time to claim Social Security. 
• Prepare for unexpected costs. 
• Balance investment growth with protection from market losses. 
• Consider whether you need guaranteed income beyond Social Security. 

A professional can also help you adjust your retirement plan as your needs or financial circumstances change. 

Is it smart to pay off a mortgage before retirement?

It depends on your situation. Paying off your mortgage before retirement can lower your monthly expenses and make a fixed income easier to manage. It can also build home equity that may serve as a financial resource later. But paying off a mortgage early is not the right choice for everyone, especially if it would deplete your savings or prevent you from paying off higher-interest debt (e.g., credit cards).

If becoming mortgage-free is one of your goals, consider making extra payments toward the principal. This can shorten your repayment period and cut down on the total interest you pay. Refinancing to a shorter loan term may be another option, but be aware that it can raise your monthly payment and involve closing costs.

Before changing your mortgage payments, check to see if your loan has a prepayment penalty. A financial professional can help you strategically balance mortgage repayment with your retirement savings, emergency funds, and other retirement goals.

Frequently asked questions (FAQ)

Why is it important to start planning early for retirement?
Starting your retirement planning early gives your money more time to grow and makes it easier to build savings gradually. It also gives you more options if you need to retire sooner than expected. Revisit your plan on a regular basis and think about how you can create dependable income to cover your expenses throughout retirement—so you can retire worry-free.

What is the best age to retire? 
There’s no one “right” age to retire. The best time depends on your health, finances, job, and personal goals. Keep in mind that retiring earlier can affect your pension, Social Security benefits, health coverage, and the number of years your savings must support you.

How can I create guaranteed income in retirement?
You can build reliable lifetime income from Social Security, a pension, or certain types of annuities. A qualified financial expert can help you explore your options and compare costs and risks.

This contributed article was edited by NCOA Staff Jackie Thomas on September 22, 2026.

Sources

1. Nationwide Financial Growth & Protection Index Results. June 2026.

2. Forbes, “America’s Seniors in Debt: A Growing Problem.” Found on the internet at https://www.forbes.com/advisor/retirement/seniors-debt-statistics/#seniors-and-credit-card-debt