Pre-Investment Strategies

• 1). Refinance your mortgage, cut costs in daily expenses and free up as much money for your retirement savings as possible. For example, if you can free up $2,000 per month, in 10 years its value could grow to as much as $144,530, assuming an 11 percent interest rate. Continue investing for 30 years and your nest egg could grow to $443,826.
  
  
• 2). Set out your retirement goals. Think about where you will retire, whether you will travel, what forms of entertainment you plan to partake in and how much it will all cost. Put a dollar value on these goals so you have an idea what your monthly overhead will be after you retire.
  
  
• 3). Scan through a list of your current monthly expenses. Identify the items you could do without and eliminate them so you can afford to invest in your retirement. For example, you could do your own pedicures, eat out less or hold onto your car longer than usual. Invest whatever you save. You may find that many budget cuts are relatively painless.
  
  
• 4). Request your projected retirement benefits statement from the Social Security Administration. It estimates how much you can expect to draw in monthly Social Security payments when you retire, and will give you a better idea of the additional retirement income you should accumulate before you attempt retirement.
  
  

Investment Strategies

• 1). Invest in a tax-deferred retirement program such as an Individual Retirement Account (IRA). You must pay penalties on IRA withdrawals prior to retirement. So, secure your emergency fund before investing in IRAs. It may also yield tax benefits. Consult your tax adviser at tax time to determine your savings, if any. (See References 2)
  
  
• 2). Take full advantage of your employer's 401k plan. Some employers match your 401k contributions, making it an extremely lucrative way to invest. This type of investment is also tax deferred.
  
  
• 3). Consult a financial adviser to determine your optimal risk tolerance for your retirement portfolio, and adjust your investments accordingly.
  
  
• 4). Continue working until you have met your investment goals. If you need more income than you have saved, work to make up the shortfall. Part- or full-time income after retirement age assures that you will have adequate income later on in life.