Plan for Healthcare Costs

Healthcare can be a significant expense in retirement. Consider investing in a Health Savings Account (HSA), which offers tax advantages and can be used for medical expenses. Contributions to an HSA are tax-deductible, the earnings grow tax-free, and withdrawals for qualified medical expenses are also tax-free. Plus, after age 65, you can withdraw funds for any purpose without penalty, although you’ll owe income tax on withdrawals not used for qualified medical expenses.

Pay Off High-Interest Debt

High-interest debt can eat into your retirement savings. Make a plan to pay off such debts, starting with the ones with the highest interest rates. This might include credit card debt, personal loans, or high-interest car loans. Paying off high-interest debt can free up more money for retirement savings and reduce financial stress in retirement.