8 Money Experts Reveal Their No. 1 Piece of Retirement Advice

Planning for a comfortable retirement doesn’t have to be difficult, but it does require intentionality. GOBankingRates interviewed eight financial experts to get their best retirement and investing advice. Here’s what they recommend.

1. Get Out of Debt

As the Federal Reserve raises interest rates, debt is becoming even more expensive, warned Jay Zigmont, CFP and founder of Childfree Wealth. “Set a goal to first get out of all your consumer debt — everything but your home,” he said. “Then try to pay off your home before retiring. When your debt is paid off, you effectively get a risk-free return on the interest you would have paid and then will have more money to invest.”

2. Have a Retirement Income Goal

To save enough for retirement, try to figure out how much you think you’ll spend. Many people fail to figure out the net income they will need to pay their bills and support their desired lifestyle in retirement, said Devin Carroll, owner and lead advisor at Carroll Advisory Group. “If someone has $1 million saved but finds out at retirement that they need $12,000 per month, they’ll be in for a bad surprise,” he said.

3. Set Up a Saving and Investing Plan

A formal retirement plan should include an investment strategy and take into account future and current taxes, your retirement age and Social Security income, said David Rosenstrock, director at Wharton Wealth Planning. “Those who follow a specific financial plan can expect to have better average returns and long-term success in retirement than those who do not,” he said. You should also regularly update this plan as the market and your circumstances change.

4. Find a Source of Lifetime Income

Saving for retirement is a step in the right direction, but it’s a good idea to supplement it with a source of income that will stay consistent in retirement, said Yanelys Benham, a wealth management advisor at TIAA. Otherwise, you could burn through your savings if retirement lasts longer than you expected. “There are three sources of income,” she said. “One is Social Security, but that’s often not enough by itself. Another is pensions, but those are becoming increasingly rare. The third is annuities, which a growing number of workplace retirement plans are including as an investment option. Talk to your employer or a financial consultant to learn more about your options and which ones would work best for you.”

5. Save for Healthcare

Focusing solely on tax-sheltered accounts like Roth IRAs or 401(k) plans can cause people to ignore the fast-rising costs of healthcare, said Ari Parker, a Stanford-trained attorney and co-founder of Chapter, a Medicare advisory organization. “According to a Fidelity report, a 65-year-old couple should have at least $315,000 saved for healthcare costs alone,” he said. “People who don’t plan ahead often risk being hit with an unexpected medical bill.” To help alleviate medical expenses, consider contributing to a health savings account, which allows you to pay for healthcare costs in retirement tax-free.

6. Save Extra To Invest In Yourself

In addition to whatever you contribute to your retirement accounts, set aside another 10% of your income in a separate bank account, said Matthew Grishman, principal wealth advisor at Gebhardt Group. “I recommend that this account be earmarked for helping people invest in themselves, to become the best possible version of themselves,” he said. “Whether it’s taking a class, learning a new craft, traveling halfway around the world to learn how to cook a new regional cuisine — something that deepens who you are and what you are capable of becoming.”

7. Do Annual Financial Planning Projections

As you get closer to retirement, you’ll need to reassess your financial plan more regularly. CFP and Family Financial CEO Tammy Trenta’s No. 1 piece of retirement advice is to do annual financial planning projections for five years up until retirement to figure out how much you need to withdraw from your investments. “Then, make sure you have five years of that withdrawal amount in bonds and a six-month emergency cash fund,” she said. “This will allow your investments to withstand market volatility and prevent you from having to pull from stocks when they’re down.”

8. Set 3 Goals for Your First Year of Retirement

Goal-setting can give early retirees a healthy focus, said Herman “Tommy” Thompson Jr., a certified financial planner with Innovative Financial Group. “I don’t care if it’s painting the house, seeing the grandchildren every week, flying to the Philippines, or playing 100 rounds of golf — set goals and achieve them,” he said. “Achievement gives our brain a rush of endorphins and helps us maintain healthy behaviors.”