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9 Retirement Planning Steps Experts Want You to Take Before You Turn 50

Retirement may still feel like it's a long way off, but by taking these simple steps now, you can ensure a rosy tomorrow.

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Starting early is wise

Forty percent of American workers aren't confident that they have enough money to retire, according to a 2017 study by the Employee Benefit Research Institute. But as is the case with any challenge, the sooner you start preparing, the easier it is to achieve your goal.

What many people might not know is that preparing for retirement entails more than socking away money for the future. You need to build a stable financial foundation all around and keep it that way. Check out this timeline for sound long-term retirement planning.

To help you determine the best steps to take, we asked a handful of financial advisors to share their best tips. Here are the top nine.

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Determine your baseline expenses

It's impossible to know for sure how much money you'll need in retirement without tallying your basic costs. "These expenses keep the roof over your head, food on the table, and the lights on," said Arnie Cabiles, a certified financial planner (CFP) and owner of Achievable Wealth. "This will help when using one of the many retirement calculators to determine funds needed to retire or when planning with a financial advisor."

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Know where you stand

The only way to know if you're ready for retirement is to do the math. "Do a retirement calculation to see if you are saving enough for retirement," said Kate Cote, a CFP, investment advisor, and owner of Red Clover. "Just about every brokerage firm, mutual fund company, and 401(k) has a free calculator." In addition to estimating your expenses, estimate your income from sources such as retirement savings, Social Security income, pensions, annuities, or a part-time job. Doing so can give you a better idea of how much you need to save each year.

For more planning advice, read what these nine retirees wished they had done with their money.

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Double up on your IRA contributions

If you're married, you can contribute up to $5,500 per year to two separate individual retirement accounts (IRAs) for you and your spouse for a total of $11,000. "If your income permits, contribute the maximum to a Roth IRA," said Alexandra Baig, a CFP and founder of Companions on Your Journey. "Roth IRAs grow tax-deferred, and withdrawals are tax-free if the account has been open for five years and you are over age 59 and a half."

If you earn too much to contribute to a Roth IRA (more than $199,000 as a couple), Baig recommends using a backdoor Roth IRA. You can do this by making contributions to a traditional IRA and then convert them to a Roth IRA. 

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Tackle your credit card debt

One of the biggest threats to your financial security at any stage of your life is high-interest debt. The average U.S. household has $8,732 in credit card debt, according to the latest data from the Federal Reserve and U.S. Census Bureau.

"Personal loans can be great because they allow you to consolidate your multiple debts and potentially lower the interest rate you're paying," said Maggie Germano, a certified financial educator and financial coach. "I've had clients [who] have four to five credit cards to pay off, and the multiple bills and varying interest rates stress them out and make it more difficult to manage." Avoid trouble by making sure you never use your credit card in these situations.

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Pour cash into an HSA

While 401(k)s and IRAs get most of the attention when it comes to retirement savings, a health savings account (HSA) might be a better option.

"These accounts are the most tax-advantaged retirement savings accounts available," said Tripp Yates, a CFP, certified public accountant, and owner of Eaglestrong Financial. "You get a tax deduction for your contributions, no tax on investment interest or gains, and you pay no taxes on withdrawals as long as you use [the money] for qualified medical expenses."

If you're eligible for an HSA, you also can use this account to pay for Medicare premiums and other health-related expenses in retirement.

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Write a will

As you get closer to retirement age, making sure your affairs are in order if you become incapacitated or die is paramount.

"By age 50, you should definitely have a will in place, preferably done by a licensed attorney," said Clint Haynes, a CFP and founder of NextGen Wealth. If you can't afford an attorney, however, there are some DIY options, including Nolo, LawDepot, and LegalZoom. Also, make sure you avoid these 12 common budgeting mistakes in retirement.

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Prepare for a rainy day

"During the last financial crisis, many people were forced to significantly deplete their 401(k) accounts to pay for expenses," said Cote. To inoculate yourself somewhat from market corrections, Cote recommends creating an emergency fund and starting to contribute to it.

"A good rule of thumb is to have three to six months of your living expenses set aside in the emergency fund," said Cote. "Even in retirement, having an emergency fund is a good idea for unexpected expenses."

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Don't pump the brakes too hard

As you approach retirement, you might be tempted to become more conservative with your retirement investments. According to Haynes, however, that could be a mistake.

"You can still take some risks; you still need that money to grow," he said. Make sure the risks are calculated, though, and consider working with a financial advisor who can offer professional insight. 

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Start looking for your 'second act'

"We often use the word 'retirement' to mean that we are no longer working," said Pam Horack, a CFP and owner of Pathfinder Planning LLC. "That is far from the truth. Older Americans continue to maintain active lifestyles by volunteering in their community, starting a business, or pursuing interests and hobbies they didn't have time for when working." To ensure that you stay physically and mentally fit, start thinking about how you want to spend your time. Then, adapt your retirement planning accordingly. Next, check out these 11 smart tips on retiring early, from people who figured out how.