Michael Chamberlain: 8 Steps To Take When You're 20 Years From Retirement

1. Fully fund an emergency account of three to six months of living expenses to avoid tapping into your 401(k) or home equity in the event of an emergency
2. Boost your earning potential and benefits package now by contributing the maximum annual amount to your 401(k)
3. Contribute money to a Roth IRA or other account to make sure you are saving in a tax-optimized manner
4. Coordinate your insurance needs with your employer’s benefits package to be sure you have adequate coverage should you become disabled
5. Ensure you have a diversified investment portfolio so that you are investing for growth, and create tax diversification by allocating assets across taxable, tax-deferred and tax-free sources
6. Make sure you have basic estate planning documents in place (i.e., a will, power of attorney, possibly a revocable trust, a living will, a health care proxy)
7. Set a benchmark “magic number” for an adequate retirement fund and establish a step-by-step plan for reaching your goal
8. Do not sacrifice your retirement to put your children through college. It is possible to take out loans for college but not for retirement

Source: Nerd Wallet
Source URL: http://www.nerdwallet.com/blog/finance/advisorvoices/8-steps...

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