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Eight steps to take when you're ten years from retirement

A decade is ample time to change the trajectory of your retired life. Use these tips to spend your last 10 working years effectively!

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Paul Sancya/AP/File
K.D. Bullock, 70, retired from the Detroit Police Department for nearly 17 years, sits in the living room of his home in Detroit, Tuesday, July 23, 2013.

If you’re a decade or so from retirement, chances are you’ve spent lots of time envisioning what life will be like once you stop working. If you haven’t done a lot of planning, perhaps you’re worried about whether you’ll be financially prepared. Fortunately, a decade is plenty of time to alter your trajectory if necessary.

Ten years out is a good time to ramp up your savings, get rid of your debt and reconsider your portfolio, according to the National Association of Personal Financial Advisors, the largest fee-only financial advisor group in the U.S.

Here’s NAPFA’s list of the eight items you should address today to help get you ready for retirement in 10 years:

  1. Be tax efficient with your investments. For example, you should defer as much of your salary as you can to your defined contribution plans.
  2. Save to an emergency fund and stay aware of your company’s financial situation. Companies are prone to reorganizations and layoffs, and longtime workers can be vulnerable.
  3. Brainstorm any big-ticket financial commitments for the next 10 years, such as taking care of an elderly parent, and consider how such expenditures might affect your ability to retire when you’d like.
  4. Take a hard look at any major debts that you have and develop a 10-year plan to eliminate them.
  5. Reallocate your portfolio based on your earnings timeline with a focus on performance, risk and expenses. Decide when, or whether, you should shift to a more conservative asset allocation.
  6. Review what your tax obligations may be with your current investments and use tax-optimization strategies to boost your savings.
  7. Review your estate documents to ensure the language is still accurate. For example, are the named trustees and beneficiaries still alive and capable?
  8. Research when your stock-based compensation might expire and what stock awards you can retain after retirement.

With 10 years to work with, it’s not too late to save enough to fund a reasonable retirement. But without a smart plan in place, it might not be the retirement you imagined. If you need help tackling the items on this list, consider working with a professional. You can find fee-only planners through NAPFA.

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