15 Moves to Make Now to Set Yourself Up for Secure Retirement

You deserve financial security in your later years. But it's up to you to create it for yourself. And the sooner you start working on that, the more likely it is that you'll have the money you need.

So what can you do to begin working toward building a nest egg that provides all you need once your paychecks stop? Taking these 15 steps will help you set yourself up for a secure retirement.

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The age when you retire affects all aspects of your finances in your later years. If you leave work at an earlier age, you have less time to save and may find yourself with a reduced Social Security benefit if you are hit with early filing penalties.

That's why it's helpful to know when you plan to retire so you can develop a plan to be ready by your target date. To be sure you don't end up with a shortfall, you may also want to assume that date will be pretty early on even if you hope to stay on the job for longer.

ALSO READ: Over Half of Workers Have an Unrealistic Retirement Plan -- and It Could Cost Them Big

Many people assume Social Security will provide them with a hefty amount of money and that these benefits may even be large enough to cover all their bills.

That's simply not the case, and the sooner you make a realistic assessment of what Social Security will do for you, the easier it is to make a plan to supplement income. You should sign into your my Social Security account so you can get an accurate picture of income from this source.

Since you need supplementary savings to add to Social Security, it's important to figure out exactly how large your nest egg should be. By setting a retirement goal, you can then ensure you're doing all that you need to hit your target.

It's easy to set a goal by using a simple formula, such as assuming you'll need 10 times your final income. You can then use the calculator at Investor.gov to figure out how much to save each month toward your goal.

You can make a very accurate estimate of your necessary monthly savings if you know your target retirement date and can estimate future returns. Armed with this information, you'll know what to set aside each month to be a financially secure senior.

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Taxes are a big expense you will have to contend with in retirement, and you should learn the rules for how they work. That's because decisions you make now about what retirement accounts you invest in can affect the taxes you owe.

For example, if you select a Roth IRA or Roth 401(k) instead of a traditional account, you do not get to deduct contributions made when you invest in your retirement plan. But you will be allowed to take money out tax-free as a senior and can make sure your Social Security benefits aren't taxed.

Learn the rules for taxation of account distributions, pension income, and Social Security income to make the right choices about where your investing dollars should go.

After researching tax rules, you can open a tax-advantaged retirement plan.

By using either a traditional or Roth account, you can get tax breaks now or in retirement and the government can help subsidize your efforts to build a generous nest egg.

Depending on your income, contributions to this account may also allow you to qualify for the Saver's Credit and get even more help investing for your future.

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If you work for a company that offers a 401(k), look into whether your employer matches contributions to it.

If you can get this free money by investing in your workplace retirement plan, you will want to be absolutely sure to earn enough to max out your employer match.

ALSO READ: How to Get the Most Out of Your 401(k) Company Match

Making contributions to investment accounts automatically reduces the chance you will miss a month. The default is that your money will go into retirement savings, and most people won't go to the extra effort to change this status quo.

You should know how much to invest each month if you've done the other steps mentioned, so you can arrange to have the right amount put into whatever tax-advantaged retirement plan you chose.

Financial security in retirement requires you to have a large nest egg, and it's easier to make that happen if you're investing your money so you can benefit from compound growth. Once you've invested, your money earns returns that are reinvested so your account balance increases on its own.

Investments carry risk, though. You'll need to think about how much risk you're willing to take on. If you're younger, you can usually afford higher-risk investments with more potential for better returns.

ALSO READ: Understanding Your Risk Tolerance

Your investments should be divided across a wide array of different asset classes. This could include stocks, bonds, and real estate. The right mix of investments ensures you are exposed to a reasonable level of risk and have the potential to earn generous returns.

Your asset allocation will also need to change over time as you get closer to retirement, so be prepared to rebalance your portfolio at least once a year.

You don't want to invest in anything you don't understand, as this increases your chance of loss. You should research different kinds of investments carefully so you can maximize the chances you will earn returns that help you become a financially secure senior.

If you don't want to spend a ton of time on this process, investing in exchange-traded funds or mutual funds may be your best bet. But you could earn more generous returns by investing in shares of individual companies if you know how to pick stocks to buy.

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When you invest in assets for retirement, you'll want to make sure your portfolio is diversified. By spreading your money around in different investments instead of putting all your eggs in one basket, you can reduce the chances of outsize losses.

ALSO READ: Understanding Portfolio Diversification

Healthcare is extremely expensive in retirement, although many people incorrectly believe Medicare pays for everything they need.

You should have a dedicated retirement plan just for healthcare expenses so you don't have to drain your nest egg if you or your spouse gets sick. If you are eligible, a health savings account (HSA) is an ideal place for this kind of savings. An HSA provides a tax break when you contribute to it, and it lets you make tax-free withdrawals if money is being used for qualified medical expenses.

Going into retirement with a lot of debt means you need much more income. That makes it harder to retire, since you will have to budget to pay creditors.

If you can repay your debt ASAP, you can devote more money to retirement savings now instead of paying interest charges. And you can go into retirement without obligations you have to fulfill.

ALSO READ: How to Pay Off Debt

Having money saved for emergencies ensures you will not have to drain your retirement nest egg to cover unexpected expenses before retirement.

Making early withdrawals from a retirement plan in order to cover emergency costs can be a huge mistake because you will likely get hit with a 10% tax penalty and will lose all the returns the money could have earned over time.

Seniors can also face emergencies, and having funds set aside to cover them ensures you won't have to take too much out of your savings and risk draining your accounts too fast.

Finally, one of the best ways to make your retirement more secure is to earn more during your life. If you can increase your income, this can result in a larger Social Security benefit. And you can save more money for your future if you earn more throughout your life.

Furthering your education, taking on more job responsibilities, negotiating your salary, and even looking for a new job or taking on a side job can all help you to earn more now and have more security later.

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If you aren't already taking these 15 steps, now is the time to start. The sooner you begin working on preparing to finance your later years, the more likely it is you will end up with the money you need to be free of money worries as a senior.

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