Worried About Retirement? 3 Moves That'll Help You Change Your Mindset

Worried About Retirement? 3 Moves That'll Help You Change Your Mindset

  • 0

Retirement is a scary prospect. Think about it: It's basically several decades of unemployment, assuming you don't work in some capacity during that time, coupled with a host of potentially unknown expenses, like repairs on your aging home or medical costs that come in higher than anticipated.

If you have concerns heading into your senior years, you're not alone. But here are a few steps you can take to ease those worries and approach retirement with a lot more confidence.

1. Map out a budget in advance

Getting a handle on what retirement will cost you is a good way to give yourself peace of mind. As that milestone nears, take some time to think about where you want to live, whether you'll own a home or rent, and what you'll do with your newfound free time. Then, do some research to see what your lifestyle will cost you, and figure out how much monthly and annual income that translates to. From there, you'll be better equipped to assess your savings and adjust your plans if necessary.

For example, you may find that to support the lifestyle you're hoping for, you'll need to work and save for two extra years. But that may be a more-than-worthwhile sacrifice if it buys you the retirement you really want.

2. Boost your savings -- both general and healthcare-related

The more money you have going into retirement, the more assured you'll be of having the means to pay your bills. The good news is that popular retirement savings plans like IRAs and 401(k)s have catch-up provisions for older workers, so if your savings need a late-in-the-game boost, that option is on the table.

For the current year, anyone 50 or older can sock away up to $7,000 in an IRA or $26,000 in a 401(k). The limits for younger workers are $6,000 and $19,500, respectively. If you have a 401(k) and are five years away from retirement, maxing out at the current level will leave you with an extra $143,668 on top of what you've already saved, assuming your investments generate a relatively conservative 5% average yearly return during that time.

But don't just max out your IRA or 401(k); max out your health savings account, or HSA, if you're eligible to participate in one. You can contribute up to $3,550 this year on your own behalf, or up to $7,100 on behalf of a family, and if you're 55 or older, you get to put in an additional $1,000 on top of whichever limit you already qualify for. And as a reminder, HSA funds don't expire, so you can carry them into retirement and use that money as a dedicated source of healthcare spending.

3. Maximize your Social Security benefits

The more money you get from Social Security, the more financial flexibility you'll buy yourself as a senior. There are several things you can do to boost your benefits. For one thing, you can hold off on claiming them past your full retirement age, which is either 66, 67, or somewhere in between, depending on the year you were born. For each year you delay your benefits, they'll increase by 8% up until age 70, at which point those increases stop.

You can also boost your Social Security benefits by fighting for raises later on in your career, since your earnings are tied directly to the amount of money you're eligible to collect as a senior. Similarly, you may be able to boost your benefits by extending your career a bit. Your benefits are based on your 35 highest-paid years in the workforce. If you're earning more toward the end of your career than you were earlier on, you can replace a few years of lower earnings with a higher income to increase the monthly retirement benefit you're entitled to.

It's natural to be nervous about leaving the workforce and entering retirement, but rather than spend your days worrying about it, make an effort to budget for your senior years, increase your savings, and get the most out of Social Security. Doing so could save you a world of stress -- and help you enjoy the period during which you wind down your career and gear up for what lies ahead.

The $16,728 Social Security bonus most retirees completely overlook

If you're like most Americans, you're a few years (or more) behind on your retirement savings. But a handful of little-known "Social Security secrets" could help ensure a boost in your retirement income. For example: one easy trick could pay you as much as $16,728 more... each year! Once you learn how to maximize your Social Security benefits, we think you could retire confidently with the peace of mind we're all after. Simply click here to discover how to learn more about these strategies.

The Motley Fool has a disclosure policy.


The business news you need

* I understand and agree that registration on or use of this site constitutes agreement to its user agreement and privacy policy.

Related to this story

Most Popular


Chances are that if you have student loans, you need every bit of extra cash that you can get. Did you realize that your student loans might be able to generate some cash for you?

Under certain circumstances, you may be able to save on your tax bill by deducting the interest that you pay on your student loan. The total deduction from your taxable income could be as much as $2,500. As a final bonus, you do not have to itemize to claim this deduction.

To be eligible for the deduction, your loan must meet certain qualifications. It must have been made to cover qualified education expenses as defined in IRS Publication 970, including tuition, fees, and most room and board charges. The loan cannot have come from a relative or via a qualified employer plan, and the e...

9 Crucial Tax Deductions

Your Unpaid Student Loan Could Cost You Your Tax Refund

Only 25% Of Americans Know This Simple Tax-Savings Trick

  • Updated


Thanks to the Affordable Care Act (ACA), you should receive 1095 forms along with the W-2, 1099, and other tax forms that you receive from employers and financial institutions. The 1095 forms verify your health care insurance status for tax purposes. 1095-A forms debuted in 2015, while taxpayers received 1095-B or 1095-C forms for the first time in 2016.

All You Need to Know About the ObamaCare Tax Forms

Form 1095-A is issued through the Federal Health Insurance Marketplace for those who purchased health insurance through the marketplace. Effectively, it is your proof of insurance if you are receiving insurance outside of an employer. All consumers who received cost assistance through the marketplace need the 1095-A form to be able to file their taxes properly.

Forms 1095-B and 1095-C are complementary forms...

Tax Impact Of The Affordable Care Act

ObamaCare Savings

8 Of 9 Financially Vulnerable Americans Used Tax Refunds To Pay Bills


The IRS recommends that you keep tax records for at least three years from the date you filed your original return, and longer for special situations. You may need copies of your tax returns for tasks like filing future years' taxes, applying for a mortgage loan or student aid, or settling IRS inquiries.

How to Get Your Past Tax Returns

If you cannot find your old tax returns and need to order a tax return transcript from the IRS, you have several options. For the really old-school methods, you can call the IRS at 800-908-9946 and follow the prompts, or fill out IRS Form 4506-T or Form 4506T-EZ for an individual transcript and mail it to the address noted on the form. The IRS suggests that you submit mail requests thirty calendar days in advance of the need to make sure you don't miss the...

What Is My IRS Pin?

Getting The Jump On April 15

6 Tips For When An IRS Letter Arrives In The Mail

Get up-to-the-minute news sent straight to your device.


News Alerts

Breaking News