1) Delay claiming your Social Security benefits, if possible. You can begin collecting Social Security at age 62, but your monthly benefits will be permanently reduced. It’s usually best to wait until full retirement age to claim un-reduced benefits. But if you can wait to claim until your full retirement age, your benefits will grow 8% a year, up until age 70.
2) If you don’t have a financial plan, get one done. If you have a financial plan, update it. It should have five areas: investments, income, tax, health care, and estate planning.
3) Start saving for an emergency fund that can be used approximately five years away. The reason for this is that by the time you retire you will have saved two years of expenses in cash (in your retirement plan). You should also consider having about three months’ worth of income liquid in a money account so it can be accessed in an emergency or an unexpected life event.
4) Max out your contributions to your retirement accounts. Consider maximizing your employer plan’s 401(k) prior to December 31. Please also consider maxing out the contributions into any IRAs, 401(b)s, or 529 plans. Take advantage of all tax-deferral vehicles, assuming you don’t need the assets in the near term.
5) Rebalance your portfolio. Sell some of the winners, and reallocate some of that cash. You want to rebalance so that you can get the most return for the amount of risk you want to take. If your portfolio is not rebalanced, you can be taking on more risk than you should. On the other hand, you may also want to try to invest so that you will maximize your retirement and take out more risks.