How to Not Retire Broke: 5 Steps to Secure Your Financial Future

Retiring broke isn't just about bad luck—it's often the result of poor planning and missed opportunities. The great news? You can take control right now, no matter your age or income level.

Here are 5 smart steps, each with 3–5 specific action items, to help ensure you don’t run out of money in retirement.

1. Know Your Retirement Number (and Make It Real)

Before you can secure your future, you need to know what you're aiming for.

Action Steps:

• Calculate your monthly expenses in retirement: housing, healthcare, travel, and essentials.

• Use a retirement calculator to estimate how much you'll need to save for your desired lifestyle.

• Factor in inflation—plan for rising costs over 20–30 years.

• Include healthcare and long-term care estimates—these are often the most overlooked.

• Set a monthly or annual savings goal that aligns with your retirement number.

2. Pay Yourself First—Automatically and Consistently

Waiting to save what's left over? You’re already behind.

Action Steps:

• Set up automatic contributions to your 401(k), IRA, or Roth IRA every payday.

• Increase your savings rate by 1% each year—you won’t even feel it.

• Maximize any employer match on your retirement plan—it’s free money.

• Open a separate “Retirement Freedom Fund” for investing above and beyond workplace accounts.

• Cut one monthly expense and redirect that amount into savings.

3. Minimize Taxes in Retirement

Taxes don’t retire when you do. In fact, they may get worse without a strategy.

Action Steps:

• Diversify your tax buckets: contribute to both Roth (tax-free later) and Traditional (tax-deferred) accounts.

• Consider annual Roth conversions in years when your income is lower.

• Work with a tax advisor to plan around Social Security taxation and RMDs.

• Use qualified charitable distributions (QCDs) if you're 70½ or older and charitably inclined.

• Review your taxable investments for capital gains and loss harvesting opportunities.

4. Beat Inflation Before It Beats You

Your savings lose value every year due to inflation—unless you invest wisely.

Action Steps:

• Keep a portion of your portfolio in growth assets, like stocks or equity mutual funds.

• Avoid too much cash sitting idle—only keep 6–12 months of expenses liquid.

• Invest in TIPS (Treasury Inflation-Protected Securities) as a hedge against rising prices.

• Review and rebalance your portfolio annually to stay aligned with goals.

• Educate yourself on index funds and ETFs for long-term, low-cost investing.

5. Plan for Longevity, Not Just Retirement

Retirement could last 30 years or more. Make sure your money does too.

Action Steps:

• Create a written retirement income plan that covers all fixed and discretionary expenses.

• Explore lifetime income products, like annuities, to guarantee a paycheck for life.

• Delay Social Security if possible—each year you wait increases your benefit.

• Plan for long-term care needs with insurance, a dedicated savings fund, or asset-based strategies.

• Meet with a retirement income planner to test your plan against different scenarios.

Final Word:

You don’t need to be rich to retire well—you just need a plan, discipline, and the willingness to act.

The earlier you start, the more options you’ll have. But even if you're late to the game, taking action today can radically improve your future.