Most Americans want to live until they're 100, but only 3-in-10 can afford a retirement lasting more than 20 years. Here are 5 key 'course corrections' that retirees say helped them to thrive

1. Reduce or eliminate your debt

Nearly half of workers (47%) and almost a quarter (24%) of retirees agree that debt negatively impacts their ability to save for or live comfortably in retirement, according to a recent survey by the Employee Benefit Research Institute and Greenwald Research.

Unsurprisingly, the most common financial course correction is to reduce or eliminate debt. According to the Edward Jones survey, 51% of retirees said they shrank or paid off mortgage, credit card or other debt to gain financial security. Of those, 60% say this action significantly improved their well-being — the highest impact rate of any financial course correction.

Reducing debt can provide a tremendous amount of relief because wiping out high interest charges gives retirees more control over their financial resources and opens up possibilities. Eliminating debt payments frees up money to fund what's important to you, from funding a vacation home to family vacations and gifts.

Take action

• Pay more than the minimum on your higher-interest debts and, where possible, eliminate them in one payment
• Double up on mortgage payments. (Make sure the extra payment is applied directly to the principal balance.) A mortgage calculator can help you determine the connection between extra principal paid up front and loan savings over the long run
• Prioritize paying off your highest-interest debt, such as credit cards
• Consider downsizing to a smaller home and using the extra money to pay off debts
• Put bonuses and raises toward your credit, car loan and borrowed balances

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2. Save as much as possible during your working years

Saving as much as you can during your working years is crucial to fund a long-lasting retirement. Start as early as possible to harness the power of compound interest to multiply your savings.

Despite the tremendous potential here, only 37% of pre-retirees in the Edward Jones survey said they saved as much as possible during their working years. But of those who did, half said it significantly improved their well-being.

An easy way to start saving for retirement is with an employer-sponsored retirement plan, such as a 401(k). These tax-advantaged accounts allow you to make contributions on a pre-tax basis, lowering your taxable income. Additionally, many employers match your contributions (typically at about 6%), which will help your savings grow faster. If your job doesn’t offer a retirement plan, you can still create tax-advantaged savings through opening your own Individual Retirement Account (IRA).

Take action

• Start saving as early as possible
• Contribute to an employer-sponsored retirement plan
• Review current IRA limits and income thresholds to determine your eligibility

3. Obtain supplemental health insurance

Health-care costs can break the bank. They are one of the largest potential expenses you’ll face in retirement. A single person aged 65 in 2023 may need approximately $157,500 in after-tax savings to cover health-related expenses in retirement, according to Fidelity Investments. Basic Medicare doesn’t cover all of their medical costs. For example, prescription drugs are typically covered under Medicare Part C and D plans rather than standard Medicare.

Supplemental health insurance such as Medicare plan add-ons can help retirees reduce out-of-pocket health-care costs. These are also known as “Medigap” policies, as they bridge the gap between your expenses and what Medicare covers. Retirees typically must enroll in Medicare Parts A and B to qualify for supplemental Medicare insurance plans.

Take action

• Explore your Medicare and Medigap coverage options at Medicare.gov
• Consider long-term care insurance to help pay for expenses not covered by regular health insurance, such as assisted living and nursing home care.

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4. Follow a financial plan and budget

Following a financial plan can help you get on and stay on track for retirement. Around 42% of retirees who responded to the Edward Jones survey said they developed and followed a financial plan and budget, with 40% of those respondents saying it significantly impacted their lives for the better.

A financial plan can keep you solvent in retirement and ensure that your investments are allocated properly based on your age and risk tolerance. Financial plans should cover all major aspects of your monetary life, such as investments, taxes, estate planning and risk management.

Take action

• Work with a financial planner to create a comprehensive financial plan
• Use a budgeting spreadsheet, website or mobile app to develop a budget
• Review your financial plan and budget at least annually to help you stay on track

5. Seek support from government and social services

Many retirees qualify for government and social services that cover food, medicine and housing assistance. Still, many fail to take advantage of these programs. Only 16% of retirees surveyed said they had sought financial or other support from government and social services. Among those who tapped these resources, 37% reported significant improvement to their lives in retirement.

Take action

• Access public benefit guides by state
• Contact your local senior center