How to Make Sure You Have Enough Money to Retire

Financial planning is vital for a secure retirement.

Making a financial plan image by Allen Stoner from

Planning for retirement can be a topic that causes anxiety for many people, even long before your golden years are on the horizon. While working, you want to make sure you invest enough so that you can live comfortably after you retire. This means generating enough savings and income so that you can take care of the basic necessities, travel, leave money to your children and pursue any number of other hobbies and interests. Whatever your standards for a successful retirement are, planning will help you reduce unnecessary stress and worry.

Establish a Goal

Determine what your needs will be and how much they will cost. Many people complicate this task with incomplete and unspecific retirement goals. Don't get too abstract. Whether you build your plan on best- or worst-case scenarios, it’s important to come up with a reasonable figure for how much you’ll need to support your goals. The point isn't to precisely predict the future or to be excessively conservative. The figures just provide a basis for planning. However you arrive at your figures, you can use them to determine what actions you need to take between now and your retirement.


If your employer offers a retirement plan, such as a 401(k), aim to take full advantage of the benefit. Consider insurance plans to help you save on continued coverage as you age. Diverse investment in stocks, bonds, and mutual funds minimizes your risk and makes you more likely to earn a secure return that reflects overall market conditions. If you plan right, your money can appreciate, which can earn better returns than keeping cash in a safe where it is subject to devaluation through inflation.

Cut Costs

You can cut costs in a variety of ways and to whatever extent you deem necessary. Work on developing effective budgeting techniques that can have a dramatic effect on your finances. While you don’t need to deprive yourself of important purchases while you’re working, effective budgeting allows you to save substantial amounts of money over long periods of time. For example, it's amazing what you can accomplish by taking steps such as drinking less coffee, eating out fewer times per week, or carpooling. The sacrifices you make are entirely up to you, but you should train yourself to consider the tradeoffs. Cutting costs now can save you from having to drastically tone down your spending in retirement.

Extra Income

While it might not coincide with your ideal of retirement, it is prudent to at least have the option of continued employment after your planned retirement date. If you start a small business on the side now, it could provide additional income by the time you retire. You can ask your employer about opportunities for continued part-time employment, perhaps with reduced responsibilities. (This also may ease the transition from working a 40-hour week to having all your time free. Continued employment also can help you stay active and motivated as you move toward other pursuits in retirement.