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Retirement: What You Can Do TODAY To Prepare for Retirement


Retirement or ‘The Golden Years‘ – the nice way to say ‘when you’ll have no more job and you’ll have to live exclusively from your pension, savings and probably investments. And, by the way, you’re gonna be old, so your medical bills will get higher‘.

To be honest I get chills, when thinking about this time in our lives. Not only because our youth would have passed, but because in many countries (mine as well), population is getting ‘older’, so this means the pension system is not as it used to be.

Take our grandparents for instance: they worked for about 30 years (paying very little in taxes) and already spent 20-30 years in retirement. Yes, some of them have small pensions, but my generation, in our country, will probably have almost nothing. At least not something that would allow us to afford too much food, medication and other expenses.

Even if your country has a better plan for its elder people, it’s always a great idea to also be prepared. If you don’t need the extra money, you can leave it as inheritance or just donate it.

So, today I’d like us to revise few proven things we should start doing today for our retirement:

Try to estimate how much money you’d need to retire

It’s pretty difficult to make such a ‘guesstimate‘, especially since most of us felt like budgeting for the next month was too difficult. And yet you can make at least some approximate calculations. Would you need about 200K? Maybe 300K?

The moment you have said an number it’s already easier to take the next steps. Just like with paying off debt: writing down how much you owe is already helping you create a plan and know how difficult or easy this is to accomplish.

Make a plan

Now, that you have all the data, start planning. Try to see how much money you should be saving each month, what pension systems you can use, how much you could invest etc.

While you0r initial plan won’t be perfect, it’s already a place to start from.

Start saving money

While you’re already trying to keep with everyday expenses, probably paying off debt and saving for your kids college, saving, even little money towards your pension goal is something you can and should be doing. You don’t need to save thousands of dollars each month (most of us can’t do it anyway), but even little money counts and compound interest will bring in some nice results.

Get rid of any addictions you might have developed

Smoking, gaming, anything that affects your finances should be reigned in. Stop wasting money on things that bring you no benefit. The money you stop spending like this, can be easily save for pension, debt payment or any other plans you have.

Make the most of any social security plans

401(k), IRA, anything helps. Meet your employer’s match, on 401(k) for instance. Why waste the chance to actually get some ‘free’ money. Of course this means spending less each month, but it will be worth it once you have to retire.

Look into investing

You might get scared about this idea, but smart investing can make your money work for you even better. Invest a little at first, to see how it’s going and grow your skills, then this can really push your retirement ‘forward’ together with saving money and frugal living.

Delay using your Social Security as much as possible

Not all people are willing to become totally inactive during retirement. The more years you can work, the best your financial situation will look like. Take me for an example: I run a small web design business, that already allows me to spend time with my family and work for few hours/day. This pays our bills and it’s a good way to be active and also involved in our family life.

As you can guess, I could work like this for many years, even well into retirement. So, if you still have your health and and would love to work at least part-time, when you are old, this would allow you to save a lot of money, by not ‘digging‘ into Social Security right away.

Create a clear budget once you’ve retired

Budgeting and keeping your expenses in check doesn’t end once you retire. It should be second nature already to not overspend and try being frugal as much as possible, without taking the fun in your life. Once retired, setting up a realistic budget will help you to not outlive your nest egg.

Consider estate planning

All lives come to an end and retirees should be prepared for this as well. Estate planning includes planning for your incapacity and how your estate will be managed after you’re gone. Phoenix Estate Planning Lawyer will assure that your family is able to easily step in to care for you if you become incapacitated, and that your estate is distributed the way you want on your death

Always learn

There are many personal finance books that allow you to learn many new tricks to get financially independent and secure your family’s future. There are personal finance blogs and forums, advisers etc. Keep on reading / learning / asking. The more you know about how to better make money work for you, the more chances are for a happy and stress-free retirement.


  1. If I look at some of my friends, many lack any chances to make it financially today, if they don’t get paid one month. Can only imagine their chances to actually retire one day. Really sad.

    • I think many people nowadays would be completely lost if they were to retire tomorrow. The reason why we need to take it seriously and start preparing better for those years. It’s not like we can avoid getting old 😀

  2. All great things to do to prepare for retirement. Estimating how much you need is an eye opening experimence for most! We like to think that retireing with $1M is a lot. But when you look at it spread across your retirement, you might find that it’s not much better than a minimum wage job (especially for early retirees)

    • Hello, Luke and welcome to PFtoday.

      I actually did the calculation after writing the article and husband was shocked. We are getting more preoccupied with saving for our retirement (together with caring for the baby and running a home based business) and the numbers are indeed high.

      Anyway.. knowing what we need to save does help a lot when it comes to making a good plan and sticking to it.

  3. I most agree with the suggestion above to simply start saving money. It sounds so simple but it’s the starting that gets a lot of people. One famous financial planner I often listen to always says that the #1 reason people don’t have money at retirement is because they didn’t start saving. Pretty profound, right?! 🙂 But it’s so true. While the amount you save, your rate of return, the fees you pay, etc. all have a big impact on the amount you will have at retirement, none of that even matters if you don’t start saving first. You can start small and figure those other things out as you go. Great article!

    • Absolutely. When I first started saving money (for a small emergency fund back then), it kinda seemed ‘weird’ to just keep money and not put it to ‘good’ use right now. After a while you get used to this and it makes more sense.

      Indeed, starting saving from today, even 10 bucks is a great idea. Every penny saved / invested today, will be available to you once you retire.

  4. I really am stuck on that step of working out how much I will need. Do you know any methods for trying to calculate that number? Someone told me 8x your annual income is a good rule of thumb but that seems very arbitrary. Most places just say “it depends”, but on what!

    • Now that’s not something easy to calculate. I, for instance, just took our current yearly budget and multiplied it by 30. Yeah, we plan on a 30 years retirement 😀

      Anyway, kidding aside, it was a very rough way to look at this, I am sure there are better strategies. And 8 times the annual income does make more sense.

      • I am also looking at about 30 years, and women in my family do tend to make it to 90 or beyond. But then I start wondering how to balance things like that the investments will keep earning as I start drawing down, but there is inflation to take into account. I guess I will stick with my rule of thumb for now. I think some of the financial companies have online calculators which I might try once I have the basics ironed out.

      • Agreed on the inflation issue. Reason why it’s good to save money, invest and also look into real estate, gold etc. In my country we had a HUGE inflation after ’89 and this meant that, with the savings for a house, we could afford a pair of jeans. This is why it’s always a great idea to look into more currencies and also diversify as much as possible.

  5. We kid a lot and say we will never retire like our parents and grandparents did, but the truth is, this is no joke. I think many of us rely too much on what the government will “owe” us when we’ll retire, but that’s just wrong. Making an estimation for a retirement plan sounds like an impossible task, but that shouldn’t stop anyone from saving money starting as soon as possible.

    • Well, some of our old folks worked for 30 years and have been retired for almost 3 decades. Back in the day, many would retire at 50. In our case … we’ll probably work way more, there’s no chance the state system can pay us a pension for 3 decades.

  6. Retirement does sound scary, but it doesn’t have to be. I think it’s important to be more optimistic about it and, besides everything you described above, I’d add look out for your health! You can have all the money in the world when you retire, if you don’t have your health it’s all for nothing.

  7. Would you say a reverse mortgage is something you would take into consideration? Somehow it’s tempting to consider it at least as a backup plan, in case saving money isn’t “doable” before retirement.

  8. Calculating how much money you’d need for retirement is really an eye-opening experience. I did this a year ago with a financial planner and was shocked by the huge amount. Now I save what I can and read about investing as much as possible. While we cannot predict what the future holds, it’s always better to be prepared.

  9. The problem with our generation is that we rarely think about our retirement days! I get that some people can’t make ends meet, because we live in difficult times, but even so, the rest of us have no excuse not to start saving ASAP.

  10. Always learn! This! I agree with your last remark 100% !
    Sure, it’s difficult to keep up with all the new financial trends, but being old and stubborn is no excuse! Retirement is a serious thing, even if it may seem far, far away for some of us.

  11. In my former job I had utilized my 401K plan and the $3K that I put in over time grew to a value of almost $10K over the course of 4 years. It is now sitting idle in an account because I haven’t moved it yet. My current employer does not offer a 401K plan so I will need to seek out an IRA or Roth IRA. I have yet to really dive into this but I’m glad I stumbled upon this blog because it reminded me that I really need to! I get sad to see elderly people working for places like Wal-mart or the grocery store because they are trying to keep up with their bills. I don’t want to be in that position when I am their age, I want to be able to enjoy the time I have left not worrying about whether or not I can keep the lights on or food in the fridge.


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