How to Plan for Retirement: 40+ Tips

Learn the essential steps on how to plan for retirement effectively. Secure your future with our retirement planning tips.

Retirement + Aging in Place
September 22, 2023
How to Plan for Retirement: 40+ Tips

Retirement planning can be a decades-long process –– which makes sense, considering you’re not planning a long-awaited vacation but rather an entirely new chapter of life. But a retirement plan is not just a single document outlining your ideal travel destinations and identifying potential new hobbies. Rather, it’s a complex, living plan covering everything from your post-retirement budget and potential investments to evolving healthcare needs and funding sources like using home equity for retirement. And those wondering how to plan for retirement most effectively should consider the ways to make the most of each of these retirement plan categories. 

While we can’t speed up the retirement process, we can explain how to financially plan for retirement and make the process just a bit easier. Read on for 40 tips designed to help you plan for retirement like a pro. 

Setting Retirement Goals 

When planning for retirement, the first step should be establishing clear and achievable goals. These retirement goals will serve as your roadmap, helping you chart a path to the future you’ve spent decades working toward. Here are some tips on how to set effective retirement goals:

1. Define Your Retirement Lifestyle

Wondering how much is needed to retire? Do you want to travel to far-flung destinations, or strengthen relationships with friends and family –– or is your ideal retirement one spent in the comfort of your home? These lifestyles carry vastly different expenses, and understanding your ambitions will help you plan accordingly.

2. Determine Your Retirement Age

Whether you plan to punch the clock for as long as you can or enjoy an early retirement, your retirement age can dramatically impact your retirement planning. The shorter the timeline, the more frugal the retirement –– or the more aggressive your retirement planning will be. 

3. Set Specific Financial Milestones

Your path to retirement should be paved with specific, achievable milestones. These will not only keep you on track but also make the retirement process feel far more manageable. Not sure where to start? Basic milestones can be structured around penalty-free 401k plan withdrawals and Social Security guidelines.1

Creating a Retirement Budget 

Armed with a clear idea of your retirement goals, you can now create a budget that will help you achieve them. 

4. Assess Your Current Financial Situation

Establishing a budget begins with turning the mirror on your current finances. A composite sketch consisting of your fixed income, expenses, and debts will give you a solid baseline –– and a better understanding of how much you can save for retirement.

5. Identify Your Sources of Retirement Income

Look to the future and consider all potential sources of income during retirement: like Social Security, pensions, annuities, and any potential returns from investments or assets you may have. Given that your retirement income should replace at least 70 percent of your pre-retirement income, calculating this fixed income now will help you pick up any slack down the road.2 

6. List Your Expected Expenses

Accounting for everything from housing and healthcare costs to transportation, food, and even home improvement expenses, establish an estimate of your retirement costs. If travel is in the cards, be sure to factor in this expense, too. 

7. Balance Your Budget

Now, compare your expected income to your estimated expenses. Your income should not only cover your expenses but also create room for unexpected costs and emergencies. If your income falls short, you may need to revisit your goals or consider alternative sources of income

8. Build an Emergency Fund

To ensure the effectiveness of your budget and protect your retirement savings, an emergency fund is crucial. Should unexpected circumstances arise, having three to six months’ worth of savings will provide a financial safety net.3

Ready to leverage your
home equity?

Click here

Investment Strategies for Retirement 

The sturdiest retirement plans are built on the foundation of strong investment strategies. To maximize your retirement savings and make your dreams possible, consider the following investment strategies.

9. Diversify Your Investments

It’s not just a finance-industry buzzword: having a diverse investment portfolio can help provide more consistent returns, spreading your money across different types of assets. With investments in stocks, bonds, real estate, and other assets, you can minimize your risk while potentially maximizing your returns. 

10. Understand Your Risk Tolerance

Risk will likely be a determining factor in your investment strategy, and you should assess your risk tolerance before investing. Things like your age, goals, and overall comfort level will influence your risk tolerance –– and generally, the more time you have until retirement, the more risk you can take on. 

11. Adopt a Long-Term Perspective

Slow and steady wins the race, but it also takes the prize when it comes to retirement planning. Focus on investments with a history of steady growth, and try not to get discouraged by short-term market fluctuations.

12. Leverage Tax-Efficient Investing

Those looking to make the most out of their retirement investments will need to leverage tax-efficient investment strategies. Both IRAs and 401(k)s can provide tax benefits that help your retirement savings grow faster, though in slightly different ways. 

13. Seek Professional Advice

While these strategies can help you invest wisely in your future, the above should not be interpreted as financial advice. For that, we suggest you enlist a qualified professional well-versed in retirement-focused investment tactics. 

Maximizing Retirement Savings 

For a worry-free retirement, you'll need to be sure your savings are up to snuff. Here are some strategies to help you save more effectively. 

14. Take Advantage of Employer Benefits

In the event that your employer offers a retirement savings plan, such as a 401(k), take full advantage of it. This will help you save more effectively, and if your employer matches contributions, this is essentially free money applied toward your future.

15. Automate Your Savings

If you’re historically not the smartest saver, you can take out all the guesswork by setting up automatic transfers directly from your paycheck to your retirement accounts. By “paying yourself first,” your retirement fund takes top priority (even if deposits into your piggy bank aren’t always top of mind.)

16. Increase Your Savings Rate Over Time

As you age, you might find that you’re earning more money while reducing debts –– therefore freeing up more cash to contribute to your retirement savings. Further, the closer you are to retirement, the more important these contributions will be, ensuring your savings are where they need to be to retire on schedule. 

17. Consider Catch-Up Contributions

At the age of 50, you become eligible for catch-up contributions in a retirement account like IRAs and 401(k)s.4 While only incrementally higher, these raised contribution limits allow you to turbocharge your savings in the years leading up to your retirement. 

18. Cut Back Where You Can

Based on your established budget and goals, comb through your current expenses in search of areas where you can cut back. Even the odd cup of coffee or an underused streaming service can make a significant impact when redirected toward your retirement saving. 

Social Security and Retirement 

Social Security is a valuable source of income in retirement. But to properly wield this tool, you’ll need to be strategic. 

19. Know Your Full Retirement Age

At the time of writing, Americans can retire at 62 and begin receiving Social Security benefits –– but your full retirement age is either 66 or 67, depending on your birth year.5 If you retire at your full retirement age, you’re eligible for your full benefits rather than a reduced rate. 

20. Understand Benefit Calculation

Your Social Security benefits aren’t pulled out of thin air, but rather based on your highest 35 years of earnings. By maintaining a consistent work history and driving your earning rate as high as possible, you can maximize your Social Security benefits in retirement.

21. Consider Spousal Benefits

If you're married –– and if your spouse is a high earner –– you may be able to receive higher monthly benefits based on your spouse’s earning history. 

22. Factor in Taxes

Keep in mind: Social Security benefits are taxable for most, depending on your overall retirement income. Stay up to date with the latest IRS policies to avoid an unexpected tax bill come retirement. 

Healthcare Planning for Retirement 

At the start of retirement, you may not have any notable healthcare expenses. But effective retirement planning will mean preparing for these expenses –– and considering the following tips: 

23. Review Medicare Options

Medicare offers healthcare support to Americans 65 and up, and contains multiple parts for different healthcare needs. Familiarize yourself with the different parts of Medicare, and consider additional coverage, if needed. 

24. Budget for Healthcare Costs

Between premiums, deductibles, copayments, and prescription drug costs, healthcare expenses can add up quickly. Factor these expenses into your retirement budget to make sure you're financially prepared.

25. Research Long-Term Care Insurance

Long-term care is a hefty expense –– one not always covered by Medicare –– and long-term care insurance can offer some added peace of mind in retirement. 

26. Maintain a Healthy Lifestyle

There are, however, conditions that long-term care insurance doesn’t cover, making it all the more important that you exercise regularly, eat well, and take a proactive approach to your health to stay in shape as you age.6

27. Open a Health Savings Account (HSA)

Depending on your current insurance plan, you may be eligible for a health savings account (HSA). HSAs offer significant tax advantages and roll over from year to year, so they can be used to cover health expenses in retirement. 

Estate Planning in Retirement 

Organizing your estate might not be the first thing you think of when planning for your exciting next chapter, but this important process will allow you to enjoy a worry-free retirement. 

28. Update (or Create) Your Will

A will specifies how your assets will be distributed after your passing. If you have one already, make sure you’re keeping it updated to reflect your evolving situation. Don’t have one yet? Consult an attorney to put this document together. 

29. Explore a Trust

Another type of legal tool, trusts can help protect your assets and ensure they are distributed efficiently –– while potentially avoiding tax penalties for your heirs. 

30. Designate Your Beneficiaries

By designating your beneficiaries, you can ensure that your assets –– like retirement accounts, insurance policies, and investments –– pass directly to your chosen heirs, thus avoiding the probate process. 

31. Minimize Taxes

Through this process, it’s wise to consult a skilled estate planning attorney or financial professional to explore strategies for minimizing estate taxes. When you pass, this will ensure more of your estate passes to your intended recipients. For now, it’s priceless peace of mind during retirement.

Adjusting Your Lifestyle for Retirement 

You prepare your investment strategy, your savings accounts, and your estate plan for retirement. But how do you prepare yourself? Consider the following as you adjust to this new chapter. 

32. Find Purpose in Retirement

Retirement doesn’t have to be the end of your working life. Rather, it can be the beginning of your quest toward purpose. Whether it’s in a part-time job, a volunteer opportunity, or a life-long passion you finally have the time for, use retirement to explore the things that bring you ultimate fulfillment.

33. Manage Your Time Wisely

If you’ve worked for your entire life, retirement can start to feel like having too much time on your hands. Try to develop a comfortable but engaging routine to keep yourself both active and stimulated. 

34. Stay Connected

In a post-nine-to-five life, you may realize that many of your daily social interactions took place in the office. To avoid the loneliness that some retirees face, make sure to recharge your social batteries through time spent with friends and family. 

35. Evaluate Your Living Arrangements

Maybe you no longer need your home office, or maybe your international travel plans lend themselves more to apartment living than homeownership. No matter the scenario, the lead-up to retirement is a great time to reevaluate your living situation. And if you’re looking for a way to free up your home equity while freeing yourself from the responsibilities of home ownership, Truehold’s sale-leaseback may just be the change you need. 

Want a carefree retirement in
the comfort of your own home?

Unlock your equity with a sale-leaseback.

Click here

Common Retirement Mistakes to Avoid

You’re well on your way to a worry-free retirement –– but beware of these common pitfalls.

36. Don’t Procrastinate

Retirement planning may be a decades-long process, but every day counts. The earlier you start planning, saving, and investing, the better prepared you’ll be. 

37. Don’t Underestimate Expenses

When it comes to planning for retirement, it’s better to overestimate your expenses than to come up short. Failing to account for any potential expenses can limit your retirement possibilities –– or force you to delay your retirement altogether. 

38. Avoid Overspending Early in Retirement

Once you’ve accomplished your retirement savings goals, reaped the rewards of your thoughtful investing, and finally retired from the workforce, it can be tempting to splurge. But while a retirement treat (or two) likely won’t hurt, stick to your budget and spending strategy to stay on course. 

39. Consider Tax Implications

We’ve said it once, and we’ll say it again: pay attention to your tax liability. Without proper tax planning, you may be kissing goodbye a savings you have worked so hard to accrue. 

40. Consult a Professional 

Retirement and financial planning can be complex, and it can be difficult to know if you’re making the right move. Don't hesitate to enlist the help of financial advisors, estate planning attorneys, and tax professionals whenever needed.

Retirement is an exciting time, and thoughtful planning can help prevent this excitement from turning into anxiety. Through the above tips, you can be sure you’re taking the right steps today to create the tomorrow you’ve dreamt of. 

For more retirement planning resources, or to discover how Truehold can help you leverage your home equity for a more secure retirement, contact us today. 


1. U.S. Bank. Key milestone ages as you near and start retirement.

2. Nerdwallet. Retirement Calculator.,and%20your%20needs%20may%20vary

3. Vanguard. What’s the right emergency fund amount?  

4. Investopedia. Catch-Up Contribution: What It Is, How It Works, Rules, and Limitations. 

5. Investopedia. 9 Ways to Boost Your Social Security Benefits. 

6. AARP. Understanding Long-Term Care Insurance. 

Nicolas Cepeda headshot
Written by
Nicolas Cepeda
Financial Analyst at Truehold - A Specialist in Real Estate Finance
Nicolas Cepeda specializes in financial analysis and strategic portfolio management, with a keen focus on innovative residential real estate solutions. He leverages this expertise to cover pertinent topics in the real estate and financial sectors.
Truehold Logo Image
Chat with a real person & get an offer on your home within 48hrs.
Valid number
Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.

Further Reading

View all posts

Editorial Policy

Truehold's blog is committed to delivering timely and pertinent insights in real estate and finance, purely for educational and informational purposes. Crafted by experts, our content is thoroughly reviewed to guarantee its accuracy and dependability. Although designed to enlighten and engage, our articles are not intended as financial advice and should not be the sole basis for financial decisions. Our stringent editorial practices ensure the integrity of our content, empowering our readers with valuable knowledge.

Ready to get started?

Chat with a real person & get an offer for your home within 48 hours.

Call (314) 353-9757
Get Started