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3 Things You Can Do Right Now to Make Retirement Easier

It’s reasonable to worry about retirement. After all, you’ll probably be living with less income than you enjoy today, and you can’t know how much certain future expenses will cost you. Health care, for example, takes hundreds of thousands of dollars out of many retirees’ pockets over the course of their lives.

Fortunately, there are some things you can do to strengthen your financial future and make your retirement easier and more enjoyable. Here are three actions to consider.

No. 1: Pay off debt

Lots of people are entering retirement with debt, which can make retirement more stressful. Indeed, close to half of baby boomers aged 65 to 69 in 2015 were still carrying a mortgage, per a report from Fannie Mae’s Economic & Strategic Research Group. That’s bad enough, but many retirees are also carrying credit card debt, and that can be much more pernicious thanks to steep interest rates. (The recent average annual interest rate for credit cards was close to 18%!) A 2018 survey by the Transamerica Center for Retirement Studies found that 45% of retirees had non-mortgage debt, with a median value of $4,000. If you’re being charged 18% annually on $4,000, that amounts to around $720 — a meaningful sum for retirement.

Many people in and out of retirement owe much more than $4,000 to credit card companies, and plenty of them carry mortgages, too. To best position yourself for retirement, don’t be one of those people. Aim to pay off all high-interest rate debt as soon as you can. (And by the way, you can do it — many people have paid off massive debt loads.) And see if you can pay off your mortgage, too, before retiring. A surprisingly powerful strategy that can lop years off your loan is to simply make extra payments regularly.

No. 2: Start — or beef up — your saving and investing

If you’ve been putting off saving and investing for retirement, you’re short-changing your financial future. By starting now, and being serious about it, you can make your retirement far easier (especially if retirement is still quite far away). If you have been saving and investing, there’s a good chance that you’ve not been doing so sufficiently.

For many people, the best path to a sound retirement is through stocks. The long-term average annual return for the stock market has been close to 10% over long periods, though you can’t know how it will perform over the specific period in which you invest.

The table below uses a somewhat more conservative expected average annual growth rate of 8%, showing how much you might amass over various periods:

Growing at 8% for$5,000 Invested Annually$10,000 Invested Annually$15,000 Invested Annually
10 years$78,227$156,455$234,682
15 years$146,621$293,243$439,864
20 years$247,115$494,229$741,344
25 years$394,772$789,544$1.2 million
30 years$611,729$1.2 million$1.8 million
35 years$930,511$1.9 million$2.8 million
40 years$1.4 million$2.8 million$4.2 million

See how sufficient those numbers look as retirement funds and think about how much you’re socking away each year. There’s a good chance you’ll be well served by upping your annual savings and investing more effectively. Those closer to retirement with insufficient coffers should aim to sock away even more each year. Finding more money to save and invest is easier said than done, but with a little thinking, creativity, and determination, you may be surprised at how much additional money you can save or earn.

No. 3: Read up on retirement

Finally, be sure that you read up on retirement and learn about various aspects of it, lest you end up making some costly mistakes. For example:

The more you know, the better decisions you can make about retirement, and the more comfortable and low-stress your retirement is likely to be. The learning isn’t all boring, either — it can help you maximize that all-important income in your post-work years.

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