Many financial advisers recommend planning to replace at least 75 percent of your pre-retirement gross income in order to maintain your standard of living in retirement. Sit down \u2014 ideally with a financial planner \u2014 and estimate your retirement income from savings, Social Security, pensions, annuities and other sources to ensure you\u2019ll have enough money squirreled away when you retire. You can use AARP\u2019s free retirement calculator<\/a> to assess whether you\u2019re on track.<\/p>\n Turbocharge your savings<\/p>\n Most likely you\u2019re in or near your peak earning years, and if your kids are out of the house<\/a>, you probably have more disposable income. Committing to contributing the maximum amount to your 401(k) or other employer-provided retirement plan will allow you to optimize your savings.<\/p>\n In 2025, savers can contribute as much as $23,500 to a 401(k) plan, up from $23,000 in 2024. Employees 50 and older can add another $7,500 \ufeff\u2014 the same\ufeff\ufeff catch-up contribution limit as 2024 \ufeff\u2014 for a maximum contribution of $31,000. For an individual retirement account (IRA), the standard cap for the 2025 tax year is $7,000, but if you\u2019re 50 or older, you can make a catch-up contribution of up to $1,000, for a total contribution of $8,000. If you\u2019re self-employed, you can contribute even more to a SEP-IRA: up to 20 percent of your eligible income, up to $70,000 in 2025.<\/p>\n Estimate your retirement income from savings, Social Security, pensions, annuities and other sources to ensure you\u2019ll have enough money stashed away.<\/p>\n Getty Images<\/p>\n Consider contributing to a health savings account<\/p>\n A health savings account<\/a> (HSA) offers a triple tax advantage: Contributions are pretax, earnings grow tax-free, and withdrawals are tax-free as long as they\u2019re used for eligible medical expenses. While you can use an HSA to pay for current out-of-pocket medical expenses, it can also provide a great way to save for medical costs in retirement \u2014 the \u201cbiggest bear trap\u201d retirees step on, says Erik Nero, a CFP with First Step Wealth Planning in Gansevoort, New York. You can roll over unused funds in an HSA, and with 10 years until retirement you have plenty of time for the money to grow. Many HSAs allow you to invest your contributions, enabling you to build a sizable source of tax-free money for out-of-pocket medical expenses in retirement. A health savings account is also \u201ca very low-cost way to start to fund potential long-term care costs,\u201d says David Rosenstrock, a certified financial planner in New York. \u201cYou could end up with thousands of dollars if you do it right.\u201d<\/p>\n In 2025, workers enrolled in a high-deductible health insurance plan can contribute up to $4,300 for self-only coverage or $8,\ufeff550 for family coverage, plus catch-up contributions of $1,000 if you\u2019re 55 or older. To qualify for an HSA in 2025, your health insurance plan must have an annual deductible of at least $1,650 for self-only coverage or $3,300 for family coverage.<\/p>\n Wipe out high-interest debt<\/p>\n Debt can take a big bite out of your retirement income. So while you\u2019re still earning an income, resolve to pay down as much as possible. Target high-interest debt, such as credit-card debt<\/a>, first; then move on to personal loans and home equity lines of credit<\/a> or home equity loans.<\/p>\n Accelerate your mortgage payments<\/p>\n Retiring mortgage-free is a laudable goal \u2014 it would lift a big monthly payment off your shoulders. Consider accelerating your mortgage payoff by making biweekly payments. You\u2019ll reduce the amount you\u2019ll pay in interest and shorten the life of the loan. Bankrate<\/a>, Mortgage Calculator<\/a> and SouthWest Bank<\/a> provide calculators you can use to estimate how quickly you can retire your mortgage \u2014 and the amount of interest you\u2019ll save \u2014 by switching to biweekly payments.<\/p>\n Check your withholding<\/p>\n While many taxpayers look forward to receiving a tax refund<\/a> every spring, there are better ways to make your money work for you than providing an interest-free loan to the government. If you regularly receive a large refund, reducing the amount of taxes being withheld from your paycheck will free up money that you can use to increase contributions to your retirement savings or to pay down debt. \u00a0<\/p>\n You\u2019ll need to submit a new W-4<\/a> to your employer to reduce your withholding. The IRS offers an online calculator<\/a> you can use to estimate how much federal income tax you want withheld from your paycheck.<\/p>\n Plan for long-term care<\/p>\n The Department of Health and Human Services estimates that nearly 70 percent of 65-year-olds will need some kind of long-term care in their lives, and around 1 in 5 will develop a disability severe enough to require long-term care for more than five years. \u00a0<\/p>\n Even just a few months in a long-term care facility can decimate your nest egg, with the median annual cost of a semiprivate room in a nursing home rising to more than $111,000 in 2024, according to insurance provider Genworth\u2019s annual cost of care survey. At-home care is expensive, too; the median cost of a home health aide \u2014 who offers personal assistance with activities such as bathing, dressing and eating \u2014 is $77,792 annually. \u00a0<\/p>\n![](\"https:\/\/cdn.aarp.net\/etc\/uxdia\/images\/uxdia-spinner.svg\")
<\/p>\n![\"a](\"https:\/\/www.newsbeep.com\/au\/wp-content\/uploads\/2025\/08\/GettyImages-2196260004.jpg\" "\\"Estimate")
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