3 Things You Can Do Now to Boost Your Retirement

By Lisa Backus Markets Fool.com

It doesn't matter if you're in your 30s, late 40s, or early 50s -- there's no time like the present to get your retirement under control. Though retirement planning looks different for every individual, let's go over three major steps you should take to set yourself up for a financially secure retirement.

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Do you know the monthly Social Security benefits you can expect to receive at your full retirement age? How about the amount of interest you're paying each month on your credit card with the highest balance? What about the name of the company that manages that card?

If you don't know the answer to each question, then you're not alone.According to Champlain College's Center for Financial Literacy, 77% of Americans live in states that received a grade of "C" or lower on their efforts to educate high school students about personal finances. More than a quarter of that 77% live in a state that received a "D" or "F."

In short, we as a nation are doing a terrible job of preparing ourselves for the financial realities of adulthood. The authors of the report contend that little or no financial literacy can lead to higher credit card interest rates, higher mortgage rates, and worse retirement planning, which can really impact your ability to live a satisfying life in your later years.About 52 % of American households will not be able to live as comfortably while retired as they did during their working years, according to Boston College's Center for Research.

But there are some quick steps you can take right now to start gaining control of your finances and your retirement. It just takes a little investigating and the willingness to become more financially aware.

1. Calculate Your Social Security benefits

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One of the best ways to figure out how much more you need to save for retirement is to determine how much income you already have coming to you. By signing up for a My Social Securityaccount online, you can see what your estimated monthly benefits are, and from there you can figure out how to increase them.

Signing up is easy. You can open a My Social Security account no matter how far away from retirement you are . When you get started, you'll need to fill in some basic information: your name, Social Security number, and address.You'll also need to provide some details on your personal finances, including the names of your credit card lenders and mortgage provider.

Once you're in, you can see the estimated monthly benefits you'll receive if you retire at age 62, at your full retirement age, and at age 70. These estimates are based on the presumption that you will be making the same amount of income from now until when you retire (with an annual adjustment for inflation). You can also view your last reported earnings, your earnings record (a yearly listing of your earnings throughout your work history), and what your monthly disability payment would be if you were to become disabled before retirement age.

This information is important because it helps you figure out how much money you'll need to save in order to get by in retirement. Most people will need 80% of their pre-retirement earnings to live comfortably after they retire, according to Boston College's Center for Retirement Research. Based on that assumption, if you make $40,000 a year now, that means you'll need about $32,000 a year in retirement income, and Social Security alone won't provide that.

Your My Social Security account also gives you some clues as to how you can beef up your Social Security benefits. For instance, if you find you have any years of "zero" income in your 35 top-earning years, then you can work a few years longer in order to increase your average yearly income -- and thereby increase your monthly benefit. It can also help you determine whether you should try to boost your current income in order to fatten your benefit checks.

With a My Social Security account, you can check your benefits any time you want without having to wait for statements to be mailed to you. This is a great way to determine how much you'll need to save in order to retire in comfort.

2. Get control of your money

One of the best ways to determine what you really can afford to put toward your retirement is to make sure you know exactly how much you have now. If you are thorough, you'll find that there are probably at least a few extra bucks in your budget that can be redirected toward your retirement.Balance your checkbook frequently and look for any bank fees that you may be able to avoid by signing up for a different type of account. Some banks will suddenly start charging fees that you can have waived if you take the time to question the charge, rather than blindly letting the money float out of your account each month.

If you can avoid a $5-a-month savings account fee by having $25 a month automatically transferred from your checking to your savings account, then do it. That totals $60 extra a year plus the $25 a month you're automatically saving.

Or let's say you're digging through your finances and you find a savings account you haven't touched in a while. Even if it contains thousands of dollars, the interest it's now making is probably minimal. Thatmoney could be earning you much more if you put it in a tax-advantaged retirement account that's primarily invested in stocks.

The goal is to have a solid working knowledge of what you have and how you can translate it into more resources for your retirement.

3. Pay down those credit cards

High credit card debt hampers your ability to save for the future, and when you're retired and living on a fixed income, high credit card debt can seriously impact your ability to pay for life's little luxuries -- or even your basic living expenses.Remember: When you're retired, you'll be living on less income, but your living expenses won't necessarily decrease accordingly.

By carrying a lot of credit card debt in the years before retirement, you're giving away money that you could be stashing away for when you are retired.

As an example, let's say you have a credit card with a balance of $8,000, an interest rate of 18%, and a minimum payment of 4%. If you pay the minimum each month, then it will take you over12 years to pay off that debt, and you'll end up paying $4,673 on top of the $8,000 principal. However, if you commit to paying off $300 worth of debt every month, then you'll be finished in three years, and you'll only pay $2,300 in interest. That's not a kingly sum, but it could grow significantly if invested in your tax-advantaged retirement account of choice.

Let's say you invest that $2,300 in an IRA that's weighted heavily toward stocks, and it earns 7% per year (a conservative assumption, given the historical returns of the stock market). In 22 years, it would swell to more than $10,000.

Taking charge of your finances can seem daunting. But at the end of the day -- or the beginning of your retirement -- it will be more than worth the effort.

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