Maybe you have spent the past few decades saving or you haven’t given it much thought, but either way, it’s never too late. “If you are 10 years from retirement right now and have done no planning whatsoever, it is not too late to start,” says Ryan Cicchelli, founder of Generations Insurance and Financial Services. Cicchelli says he has helped plenty of people in this situation who were still able to start saving and get on track for their retirement goals. “The best time to start planning was yesterday, but the next best time is right now,” he says. If you’re 10 years away from retirement (or would like to be at some point) here are the important money moves you should make to set yourself up for success (and savings), so you can really enjoy your retired life. Whether you have a 401(k) or a self-employed retirement account, try to maximize your contributions in the years leading up to retirement. If you have company matching for your 401(k), Cicchelli recommends putting in enough to make your employer max out their contributions to your account, even if you are unable to meet the maximums for your own. If you are over 50 years old, you can also take advantage of catch up contributions, suggests financial planner Matt Hylland. Catch up contributions allow you to put in an extra $1,000 into an IRA or Roth IRA, and $6,500 extra in your 401(k). “Taking the time and effort to do this will give greater peace of mind and a clearer picture of your spending needs when you’re ready to take that leap into retirement,” says certified financial planner Julia Pham. Figuring out how much your lifestyle costs now and what it would take to maintain it can help you find any areas that you can cut back on now to increase your savings. Pham also suggests considering your future needs when you’re coming up with a budget, because chances are, you’ll spend more than you think when you retire. “Healthcare will likely be a large expense down the road, so be prepared,” says Pham. She says a good rule of thumb to figure out how much you need to save by the time you retire is to multiply how much you want to spend each year in retirement by 25. Consider going to a financial advisor or planner to help you figure out your numbers and what would work best for your individual needs. Save up for medical expenses during your retirement by contributing to a health savings account or HSA, suggests Artem Minaev, co-founder FirstSiteGuide, a platform that provides resources for online businesses. As of 2022, you can contribute up to $3,650—where it will grow tax-free. In addition to investing your money in retirement accounts, investing in stocks and bonds is a safe and smart way to make the most of your money in the years leading up to retirement. “In the last 10 years before retirement, you should change your portfolio allocation to 50 to 60 percent stocks and 40 to 50 percent bonds,” says Brian Dechesare, founder of financial investment platform Breaking Into Wall Street. “You might take advantage of deferred income programs at companies, buy rental properties for cash flow, develop passion project consulting gigs, and other ways to supplement your primary nest egg,” says Maggie Tucker, co-host of personal finance and early retirement podcast called Friends on FIRE. Looking into multiple sources of income will give you peace of mind during your retirement and keep you active and engaged. See if you can consolidate your debt, or refinance or negotiate it. Either way, make a plan before you retire so you can pay down your debt—the sooner you pay it off, the more money you will have to put towards retirement.
