Planning to retire within the next 10 years?

Taking these actions now could help bolster your portfolio as you approach your planned retirement date.

After decades of working and saving, you can finally see retirement on the horizon. But now isn't the time to coast. If you plan to retire within the next 10 years or so, consider taking these steps today to help ensure that you have what you need to enjoy a comfortable retirement lifestyle. Examining your income sources well in advance of your target retirement date gives you time to make any necessary adjustments.

Start by envisioning the kind of retirement you want. Will you work part time, volunteer, travel? Next, develop a realistic picture of the financial resources you may need and then determine if your current ones will be sufficient to support your plan. If you find there is a gap, think about how to accumulate the additional assets you need, or adjust your vision to match your resources. By analyzing your current expenses, you may identify discretionary items that can be eliminated or reduced. "If you look at everything you purchased over the course of a month, you may be surprised at how much you can cut back to have more money to invest for your retirement," says Debra Greenberg, a director of Retirement and Personal Wealth Solutions at Bank of America.
Here are some steps to consider when you are approximately 10 years away from retirement.

1. Make sure you're diversified and investing for growth
It can be tempting to shy away from stocks to reduce risk, but the growth that stocks may provide is still important at this stage of your life. Consider maintaining a sound mix of stocks, bonds, mutual funds and other assets that fits your risk tolerance, investment time horizon and liquidity needs.

2. Downsize your debt
Consider accelerating your mortgage payments so that the loan will be paid off before you retire. To curb new credit card debt, try paying cash for major purchases. By limiting new debt and reducing existing debt, you can minimize the amount of retirement income that will be spent on interest payments. "If you pay off a credit card that charges 15% interest, it's like earning 15% on a risk-free investment," says Anil Suri, managing director in the Chief Investment Office at Bank of America.

3. Calculate your likely retirement income

Estimate your predictable income from sources such as Social Security and employer pensions. The rest of your retirement funds likely will need to come from your wages, savings and investment accounts and any wages earned in retirement. To make your assets last throughout your lifetime, the old rule of thumb was that you could afford to spend 4% of your portfolio annually in retirement. So if you have $1 million in retirement assets, you could expect to afford to spend roughly $40,000 of that amount per year when you retire. When added to your other savings, Social Security and pensions, is that enough to support the retirement you envision? "Four percent is a good starting point, but it can also be overly simplistic," Suri says. "Your own rate of withdrawal should be personalized and based on a variety of factors, such as age, gender and risk tolerance."

4. Estimate your retirement expenses
Some expenses, such as health care, may be higher later in life, while others, such as commuting or clothing costs, may decline. What you spend will depend on how you live during retirement. If you expect to travel widely, for example, your projected costs might even be higher than they are now, while you're still working.

5. Consider future medical costs
If you retire at age 65 or older, Medicare will cover the majority of your routine health-care costs, but you may want to consider supplemental coverage to help pay for your nonroutine health-care expenses, which are likely to rise as you get older. Moreover, Medicare doesn't cover most long-term care costs. Learn more about how you can prepare for health-care costs in retirement.

To help protect your retirement nest egg, consider buying long-term care insurance, which can help with expenses such as home health aides. If you buy coverage now, your premiums will be lower than if you wait a few years, and you'll be less likely to be rejected by insurers.

If you have a health savings account, consider putting in the maximum contribution. The money is tax-advantaged but distributions may be subject to income tax and penalties if they are not used for qualified medical expenses. Money that you don't spend can accumulate with tax-free compounding until you need it during retirement.

7. Plan where you will live
Where you retire could have a big impact on your expenses. For example, if you sell your house in an expensive location and move to a condo in a low-tax state your expenses could decline sharply, perhaps freeing income to pay for other priorities. You may also consider staying in your town or city, but moving to a smaller home that's more financially manageable. On the other hand, you might elect to live in an area with high living costs and taxes so that you can be near grandchildren or move to a cosmopolitan city — a move that could require you to economize.

It's never too late to get started
When your planned retirement date is a decade away it can seem like a distant event. But it's important to plan carefully and set realistic goals so that time is on your side and can help you have the means to enjoy the sort of retirement you have always dreamed of.

Even if you started saving and investing for retirement late, or have yet to begin, it's important to know that you are not alone, and there are steps you can take to increase your retirement savings. "It's never too late to get started," Greenberg says.