Expert tips to help your countdown to retirement

I am getting close enough to retirement age to have questions. If I use the bulk of my paycheck to pay bills each month, how do I give that up? Will social security and other income sources be enough? Should I retire as soon as I can collect social security benefits or work until I can't?

On one hand, I want to have enough money to live comfortably. On the other I want to have enough energy to do the things I've put off until I had more time. I'd love to take up bicycling again and I've always wanted to visit Europe. How do I decide the amount of weight to give each risk? Here I'm recommending some books that will help you move toward retirement.

Overarching retirement advice

In How to Retire With Enough Money and How to Know What Enough Is Teresa Ghilarducci offers tips for preparing financially for retirement. First, predict when you will retire, be laid off or be unable to work because of poor health. Starting in your 20s, save more than 7 percent of every dollar you earn. Oh, and finally, don't even think about withdrawing money from retirement savings. Period.

Not so easy, right? It's understandable why many people avoid worrying over retirement finances until they must. If you are reading this early in your working life, you are ahead of the game and can make things easier for yourself  later on. If you see that goalpost looming, as I do, you can help yourself by considering these tips from financial experts.

Early in your working years

In You Can Retire Sooner Than You Think, Wes Moss conducted a survey of happy versus unhappy retirees, and based his advice on  results. He offers these strategies to begin sooner rather than later. First, keep your mortgage payments below 25-30 percent of your monthly income. Moss said happy retirees own homes modest in value, and at retirement have no mortgage or have the payoff in sight. Additionally, they shop at middle of the road stores and dine at middle of the road restaurants. In this way, he says, a person might be able to save 20 percent of their income a year. Alternatively, Mary Hunt (The Smart Woman's Guide to Planning for Retirement) proposes a 10-10-80 money management plan: save 10 percent, give 10 percent and live on 80 percent.

Everyone agrees we should each build and maintain an emergency fund. Experts suggest having three months to a year's worth of living expenses. You don't want to go into debt when the unexpected happens.

Ghilarducci said pensions were the norm until the late 70s, when a lawyer introduced 401(k)s to help highly paid executives take a tax break on deferred income. Matt Krantz (Retirement Planning for Dummies) points out that pensions had their own problems. Most companies would not allow you to participate until you were 30 and you had to reach 60 before you were vested. So, 401(k)s took hold. The main problem with our DIY finance era, said Ghilarducci, is that it won't work for people if they do not voluntarily save or are not savvy enough to find good, low risk investments.

If your company offers a 401(k) with company match, take advantage of that. If your company doesn't offer this benefit, consider starting and building on an IRA. Ghilarducci said 401(k)s offer two advantages:

1. they are not taxed on income contributed and
2. many employers match your contribution at 50 cents on the dollar for up to 6% of pay.

Assess where you are financially and compare that to where you need to be. If you still have debt, eliminate as much as you can. Start with high interest rate debt followed by personal and car loans. Save the mortgage for last. Hunt suggests a repayment plan that includes

1. incurring no new debt and
2. then paying off debts starting with the one that will pay off quickest and following down the line, and
3. cut costs if needed.

A few years ago, my husband and I paused most travel and limited dining out to once weekly at modest restaurants. We buy what we can pay for in cash. This strategy has helped us whittle away at debt.

In How to Make Your Money Last Jane Bryant Quinn suggests downsizing in housing is another good place to reduce spending at this stage in life. Often we hold onto a house for sentimental reasons. But moving to a smaller place or rental with fewer upkeep needs might be a good idea now.

Moss's retiree surveys suggest that costly renovations or other large purchases be made while still earning a paycheck. Money drawn from an IRA counts as income, so you'll be penalized for using money you've saved.

"If you take money out of your IRA for big ticket purchases," said Moss, "you're raising your overall level of taxable income – and digging  yourself deeper into the hole."

One year from retirement

Think about what you want your retirement to look like. Do you want to work part-time? Travel? These answers will help you figure out what your income and expenses will be. Hunt said you can also figure out your current annual expenses and estimate how they will change. Will your house be paid off? Deduct that. Figure in expense reductions for retirement savings and work related expenses such as fuel and clothing costs. Add in costs for new travel and activities.

Decide when to sign up for social security. Ghilarducci suggests using the calculator at ssa.gov to figure out how much your monthly check changes by adjusting your retirement date. Apply for social security three months before you want it to start.

The social security website also offers information about how to sign up for Medicare even if you aren't ready to collect social security. You can explore whether or not you need supplemental insurance for uncovered health care needs. Sign up for Medicare three months before you turn 65.

These choices are not easy, but the thought of being comfortable enough to enjoy those non-working years is enough motivation to move me in the right direction. Now, where's that bicycle?