Retirement planning 101: Seven questions you need to answer

7. What else will you do?

Melanie Stetson Freeman/The Christian Science Monitor/File
Residents of John Knox Village, a continuing care retirement community in Pompano Beach, Fla., stay active with the many activities available on site – from chair yoga to woodworking in this 2010 file photo. Retirement planning is not just about how you'll save but what you'll do.

Retirement planning isn't just about saving and choosing investments. Here are some of the additional steps to consider:
 
1. Follow through on your plan. Track your progress and reevaluate your goals and asset allocation every year or so. And even if your plan stays on cruise control, many financial experts recommend "rebalancing" your portfolio once a year, to make sure the mix of stocks and other asset classes remain in the blend that's right for you.

Rebalancing can act as an automatic (but only partial) cushion against market swings. If stocks are in a bubble, you'll probably be selling some before the bubble bursts.
 
2. Think about expenses. Consider your expected lifestyle and the spending it might involve. Many planners say retirees will run through about 20 percent less money than they did as workers. In part that's because expenses like commuting go down.

Still retirement may have some extra expenses, such as long-term care insurance. And your own situation may differ from the norm. You may want to travel a lot, devote resources to grandchildren, or have to factor mortgage debt into your plan.
 
In general, one rule of thumb from many advisers is to draw down your retirement sayings by no more than 4 percent per year, to ensure that your income will last. (With fixed annuities, the size of the annual income stream is built into the contract.) 
 
3. Use your employer match. If your employer's 401(k) style plan offers to match your contributions, take advantage of it. It's leaving free money on the table if you fail to contribute up to the matching limit.
 
4. Stay fit in nonfinancial ways. Making an effort to remain active can mean lower expenses and a happier life during retirement. Similarly, making efforts to maintain your "human capital" can pay dividends. Many Americans will keep working at least part-time during retirement. With that in mind, you may want to stay active in professional networks, keep your skills up to date, or maybe prepare to branch into new career directions, such as from corporate to nonprofit work.

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