11 Beneficial New Year's Resolutions if You Want To Retire in 2025

Retirement can be a stressful experience: It’s so much more than just stepping back from the grind of work.

Instead, retirement is also about ensuring a stable financial life and creating the right lifestyle. If you are planning for a retirement that will begin in 2025, here are some important resolutions you should make.

Create a budget that helps you figure out how much you must spend every month to maintain your desired retirement lifestyle.

Divide the budget into two categories: needs and wants. You need things like housing, health care, groceries, and transportation.

Once you figure out the money you need to cover the essentials, you can consider your discretionary spending, including “wants” such as travel and hobbies.

Social Security is a critical part of most retirees’ monthly income, and the age you decide to start claiming your benefit will have a big impact on the size of your monthly check.

The later you take Social Security — up to age 70 — the larger your monthly payout will be. The opposite is also true: You can begin collecting benefits at 62, but doing so will significantly reduce your monthly payout.

Weigh your options carefully when determining when to apply for Social Security.

Debt is one of the biggest money drainers for retirees. Look at the amount of debt you currently have and create a plan to pay it off.

The avalanche and snowball approaches are two good methods for paying down debt. With the avalanche method, you focus on paying off the highest-interest debts before moving on to others. This saves you the most money, but it can take longer to pay off each individual debt.

The snowball method requires you to pay off your smallest debts first in the hope that paying off debts quickly will give you the momentum to stick with your strategy.

The top financial thing you can control in retirement is your spending.

Making a commitment to spend less can seem daunting at first, but it will pay off in the long run. Spending a few hundred dollars less per month adds up quickly.

Building a cash stockpile in a savings account is essential for retirement. Look for bank accounts with low or no annual fees and high interest rates.

Even a 1% increase in the interest rate can significantly impact the size of your overall cash stockpile.

Since you plan to retire at some point during 2025, this might be the last year you will have the income to contribute to your 401(k) or IRA account.

If you haven’t contributed the maximum in the past, now is the time to do so if you can afford it. A larger retirement account increases the odds that you will have enough money to last you throughout your golden years.

For many people, a mortgage is their biggest debt. Paying down your home loan partially or fully could make a big difference in strengthening your financial situation.

However, there are pros and cons to paying down the mortgage. On the one hand, doing so can be risky if it will deplete your cash reserves, potentially leaving you in the position of having to take on more debt later if a financial emergency arises.

On the other hand, eliminating the mortgage will save you a lot of money in the long run, especially if you have a high interest rate.

Your health care costs could be significantly higher after you retire. Keep in mind that if you retire before you're eligible for Medicare at age 65, you will need some type of health insurance coverage for a few years.

Finding the best health insurance coverage takes time. Plan ahead so you can find the most affordable option.

Also, look into assistance programs such as Medicaid if your income is low and you qualify for help.

Meeting with a financial advisor can be a wise step before you retire, especially if you plan on making a significant lifestyle change.

This type of professional can help you develop a plan for growing your investments and maximizing retirement benefits.

Over time, you should expect that even your basic costs will increase due to inflation. Ideally, you have potential sources of income — such as from a 401(k) account or an IRA — that will continue growing after you retire.

Either way, remember that the cost of living will increase as the years go by, so plan accordingly.

Many people who “retire” still work in some capacity to cover their costs. Stepping back from full-time work does not mean you must immediately start digging into your retirement benefits and accounts.

Scaling things back to part-time work or developing a side hustle are great ways to earn extra money you can use to cover retirement expenses.

Diligent planning can help you create the retirement of your dreams. If you plan to retire in 2025, sketch out a retirement roadmap that considers your total financial picture.

Once you get all of your information in order, speak to a financial advisor who specializes in the field and can get you on the pathway to a stress-free retirement.