Assess your financial plan and budget

• Begin to assess your basic retirement income sources such as a 401(k) plan, IRA, and life insurance plans.
  
  
• How much will you need to retire? Determine this by creating a budget that will enable you to pay your monthly expenses such as food, heat, rent and transportation. Consider expenses that may increase such as health insurance and prescription medicines. At the same time, consider those that may decrease, such as work-related and educational spending.
  
  
• Health care coverage is necessary in supplementing your financial foundation and these costs can add up fast. It's important to have an adequate plan both before and after retirement. After age 65 you are eligible for Medicare coverage. But what if you want to retire before then? Your employer may offer a plan for retiring employees, or you may have to look into private coverage, so be sure to consider this.
  
  
• Take into account variable expenses such as tax liabilities on your home, illness or the care of elderly parents. Other, often underestimated, variables include gifts, clothing, recreational expenses, and increases in costs of living. For valuable retirement planning resources and projected trends in costs of living visit www.usa.gov.