If you are like most people, you rely on a regular paycheck to get through the month. This income is needed to pay your bills and to otherwise fund the lifestyle that you have grown accustomed to. However, there will come a time when you no longer want to work or are able to work. Funding a retirement account now is crucial if you want to be prepared for life without the steady income associated with full-time employment.

Determine Your Financial Need

A critical step in the retirement planning and funding process is to determine what your ultimate retirement goal is. How much money do you need to live on each month in retirement? How will that figure escalate over the years because of inflation, increased medical expenses and more? The ideal retirement plan will take into account all possible expenses, as well as built-in breathing room for unexpected expenses.

Fund Your Retirement Account

After you have determined how much money you need to live on in retirement, you are ready to fund your account. You may be able to make a substantial dent in your savings goal by selling your life insurance policy or other financial assets that you no longer have a solid need for. Then, analyze how much money you need to save regularly to meet your retirement goal. Remember to factor in the growth of invested funds and the reinvestment of dividends and interest over the years.

Monitor Your Progress

Your return on investment may not be as substantial as you had hoped. Perhaps you had to decrease investment contributions for a period of time. Every six to 12 months, analyze your progress, and make changes to your financial goals as needed. This will help you to avoid running short on funds once you are ready to retire. At this late stage in the game, it may simply be too late to make changes to your retirement planning and investing efforts to cover the shortage of funds.

Pay Off Debts

While funding your retirement plan is critical, you also need to focus your attention on paying off most or all of your debts. This may include paying off your credit cards, eliminating your home mortgage and auto loan debt, and more. By spending some of your surplus funds to pay off debts, you may be able to reduce the amount of money that you need to save and invest for the future.


As you can see, you must take action regularly to adequately prepare for retirement and to properly fund your account. Retirement is a stage that you may be able to delay as needed in some cases, but other people may be forced into retirement before they are ready because of health issues, a layoff later in life, or some other situation. By spending time regularly planning and saving for retirement, you can reduce the amount of financial stress that you may feel in your later years.