It's Not Too Late to Make These 5 Retirement Moves

For many of us, retirement is around the corner, enticing us with the prospect of hours in our garden or at the local golf course, unbothered by thoughts of -- or emails from -- our workplace. For others, retirement is still a decade or three away.

Regardless of our age, there are some valuable moves we might make now to improve the quality of our golden years. It's not too late for most of us to act on any or all of them, and in many cases, it's not too early, either.

Image source: Getty Images.

1. Pay off debts

We would all do well to rid ourselves of any high-interest rate debt, such as debt from credit cards which charge many people 20% or even 25% or more in interest. Debt is handy and even necessary for some financial transactions such as buying a house or a car, but such debt typically carries more reasonable interest rates.

It can be especially good to have as much debt paid off as possible by retirement -- including, ideally, your mortgage -- so you'll face fewer obligations at a time when your income is fixed or at least more limited than it was in the past.

2. Contribute more to retirement accounts

Next, however much you've been saving and investing for retirement, see if you can do more. This is a smart move if you're closing in on retirement, as it will leave you with at least a little more in your nest egg -- and it's a brilliant move if you're still many years from retiring, as it will give those extra dollars many years to grow for you.

Check out the table below, reflecting how much you might amass over various time periods, socking away various sums regularly while earning an average annual return of 8%:

Data source: Calculations by author.

Perhaps it's obvious, but the table makes clear how powerful it can be to invest larger sums and how effectively money can grow over time. It's always in the later years that it's growing by the most each year. Successful long-term investing requires a lot of patience and staying the course.

3. Think about moving money into dividend payers

Consider adding dividend-paying stocks to your portfolio, too. This is another effective strategy for people of just about any age. If a retiree has a portfolio worth, say, $500,000, with an overall dividend yield of, say, 4%, it will generate about $20,000 annually, or around $1,667 per month, on average. That can go a long way to support you in retirement, and you won't have to sell any shares to get that income -- it will just show up in your investment account regularly.

Younger people investing in dividend payers can collect that incoming cash in their accounts and then invest them in additional shares of stock. Dividend payments can fuel further investments and help your portfolio grow faster.

4. Start thinking about your healthcare in retirement

Since healthcare is so costly and represents such a big chunk of many retirees' budgets, it's worth keeping up with the latest developments in healthcare and starting to think about what kind of coverage you'll want in the future. Medicare is available beginning at age 65, but there's a lot to learn about Medicare if you want to make the smartest decisions for yourself.

For example, be sure to consider Medicare Advantage plans, which are alternatives to "original" Medicare (often referred to as Part A and Part B). Original Medicare has its advantages, such as being accepted across the country and often charging you only 20% of various expenses -- but it has some downsides, too. If you end up facing very steep costs, even just 20% of them might be far too much to pay.

Medicare Advantage plans (known as Part C), meanwhile, are offered by insurance companies and, by law, are required to offer at least as much coverage as original Medicare -- often including vision, dental, and hearing coverage, along with prescription drug coverage. Medicare Advantage plans are also required to cap your out-of-pocket expenses, something original Medicare doesn't do.

If you're still far from retiring, you can aim to save money on your healthcare expenses via a Health Savings Account (HSA) or a Flexible Spending Account (FSA). Each offers tax breaks, and HSAs include a retirement savings feature, too.

5. Take steps to increase your Social Security benefits

Finally, get smart about Social Security, as it will likely contribute a meaningful chunk of your income in retirement. Recently, the average monthly retirement benefit check was just $1,665, or about $20,000 annually. If you have earned more than average during your working life, you'll collect more than average. And on top of that, for everyone, there are many ways to increase your Social Security benefits. Some of these ways are best acted on while you're young, such as trying to maximize your income. Others can wait -- such as trying to delay starting to collect your benefits.

For best retirement results, each of us should have a solid retirement plan detailing how much we think we need to save for our future and how we will do it. Spend some time thinking about your future starting now, and you'll likely end up very happy you did.