Bill Losey

Making retirement a reality doesn’t just mean saving more in a 401(k) or IRA. Sometimes you have to take into account every part of your financial picture before you can come up with a plan that will keep you happy in retirement.

There are seven things everyone should consider if they want to be able to retire comfortably, says Bill Losey, a certified financial planner, television personality and author of “Retire in a Weekend!”

1. Downsize your home

“Certainly, a smaller house will save on taxes, heating, maintenance, yard work and all those sorts of things,” he said.

2. Move to a lower cost area

“A lot of folks don’t want to relocate away from where they are, but if people are willing to move within a 30- to 60-minute radius, there are a number of communities with smaller costs,” he said.

That way, retirees can keep the same friends and the same support network. An alternative would be to move to a different state that has no state income tax, like Florida or Nevada.

3. Consider downsizing your car

“You see a lot of baby boomers who have three or four cars. Go from four to three or go from two to one,” Losey says. Getting rid of a car can save on insurance and overall costs. “If people don’t want to reduce the number of cars they have, downsize the size of the car. You don’t need an SUV or a big minivan. The kids are grown. Get something more fuel-efficient with a lower cost of insurance.”

4. Retire in steps

One of the mistakes many people make when considering their retirement is looking at it from a “black and white” perspective, Losey says. They have always worked full-time so retirement means they must stop working full-time.

“People should do retirement in steps,” he says. “Do a phased retirement or work part-time first.”

Many people who retire full-time end up going back to work six months later because they are bored. A phased retirement means knocking your work week down from five days to four or three, freeing up extra days per week, “which may be all the respite you need,” Losey says.

Most retirees just need free time to do the things they want to do.

A lot of baby boomers are in their 50s and 60s, which are their peak earning years.

“The biggest mistake I see is people retire when what they really want is a break,” he says.

Take a person who makes $50,000 a year working full-time before retirement. If they implement a phased retirement, they will be working less but still making more money than they would if they decided to reenter the job market at $8 or $9 an hour, Losey says. Most older people can’t find high-paying jobs when they decide to reenter the workforce.

“In this economy, it is hard to go back and get a job. Age discrimination exists. When you apply for a job, you are way too overqualified,” Losey says.

He added that age discrimination exists because older people have so much experience, people don’t want to hire them. They don’t need a rocket scientist doing the job. Owners may feel threatened by someone with that amount of experience as well.

5. Focus on becoming debt free before you retire

Pay down all of your nondeductible debts, credit cards and car loans. By the time you retire, you should only have the mortgage on your house.

“If they can pay off their mortgage, it will free up a lot of cash flow,” he says. “If someone is close to retirement and still carrying a mortgage, anticipate carrying it for five to ten years or longer.” With mortgages close to 60-year lows, those considering retirement should refinance and reduce the term of their mortgage loan.

6. Plan ahead

People in their 50s and 60s, who are in their peak earning years, should also increase their annual savings and retirement contributions. People can put $16,500 in their 401(k) and those over age 50 also have a catch up provision that allows them to put away an additional $5,500 a year.

7. Consider reducing your retirement income needs

“At the end of the day, you can only control what you can control. If you can make astute lifestyle choices, if you can control your spending, eliminate your debts and live on less, you are more in control of your future,” he says.

He encourages all of his clients to write down how much money they have coming in and how much they have going out. Go through the last two or three months to see what you are spending your money on.

“When people make that short but brief effort to see where their money is going they are stunned at the money they are spending on stuff that has no importance or significance in their life,” Losey says. “When they do the exercise, people find at least $500 to $600 per month they are wasting or pissing away on really frivolous things. They could be using that money to pay down debt, build savings or spend it on fun things, like a vacation they never get to take because they are spending their money on crap.”