Ten Steps to Financial Freedom

1. Use credit wisely and protect your identity - get a free credit report annually.

As you approach retirement, it's more important than ever not to be saddled with credit card debt. Use credit cards with low interest rates and pay off your balance each month. Your credit score affects how much you have to pay to borrow money. You want to make sure there is no erroneous information in your credit reports that would drag down your score.

Take action:

• Monitor any suspicious activity on your credit reports by ordering a credit report from a different credit reporting company every four months.

2. Know how much you need to save - complete a retirement planning calculation

Do you know how much you need to save for retirement? Similar to half of all Americans, you may not have paid enough attention to this. Figure out how much you need to save for retirement so you can make sure you'll have enough money to pay for it. It's a good first step on the road to the retirement that you want.

Take action:

• Calculate how much you need to save for retirement.

3. Use tax advantaged savings vehicles - save via 401(k) or an IRA account

Retirement savings accounts can help you build a strong financial future and save on your taxes now. If your employer has a 401(k) plan, sign up. If you don't have a plan through work, set up an Individual Retirement Account (IRA). Both options provide tax incentives to encourage you to save. And if you're 50 or over, you can play "catch up" and put extra money away. Start today.

Take action:

• Learn all about work-based retirement accounts.
• Learn more about IRAs: determine how much you can contribute to an IRA, and whether a traditional or Roth IRA is right for you.

4. Don't leave free money on the table - take advantage of your employer's 401(k) match and the Saver's Credit

Many employers match 401(k) contributions. For example, your employer may contribute 50 cents for every dollar you put into your account up to six percent of your pay. Take advantage of this free money. Use it, or you lose it.

You can get the Retirement Saver's Tax Credit if your earnings are low but you contribute to a retirement savings plan. You can save up to $1,000 on taxes if you put money in a 401(k), IRA, or similar retirement savings vehicle.

Take action:

• See how your 401(k) can grow with the employer match.
• Find out the current income limits for the Saver's Credit.

5. Don't let fees eat into your savings - know what you're paying for your investment products and services

Fees and expenses reduce your returns over time. That goes for all types of financial products. With mutual funds, invest in "no load" funds that don't charge a sales commission. To purchase stocks or bonds, consider using a discount brokerage firm and completing your trades online to keep your trading costs low. Take the time to look beyond just the investment return to the fees. That way you will have more of your money working for you.

Take action:

• Compare mutual fund fees.

6. Simplify your life - take advantage of automated savings features and easier to understand products

Saving and investing don't have to be complicated. Make it a habit to pay yourself first every month. Participate in your 401(k) plan and the money is automatically deducted out of your paycheck. If you don't see it you won't miss it. Or transfer money automatically into an IRA or mutual fund on a periodic basis. Mutual funds make investing easy by pooling together a group of stocks or bonds. Consider investing in simple mutual funds such as index funds, or lifestyle or retirement date funds that are designed to gradually become more conservative as retirement age approaches.

Take action:

• Search for a mutual fund that meets your needs.

7. Protect your nest egg- before you invest, check and ask about the product and who's selling it to you

Are you investing or gambling? As long as you have money to invest, other people will be looking for ways to try to get it from you. Watch out for shady or inappropriate investments and promises of high returns and no risk. From Ponzi schemes to promissory note scams, and rare coin deals to oil and gas ventures, we've all heard about people who've lost everything to a con. If an investment is too good to be true, it probably is. Do your homework before you fall victim to a scam.

Take action:

• Check out every investment offer and salesperson.

8. Know if you have enough to retire - assess your sources of retirement income including when best to begin taking Social Security

As you approach or enter retirement, figure out where the money is going to come from to pay for it. First, look at your retirement accounts, including pensions, 401(k)s and IRAs. They each have rules about when and how much money you must begin withdrawing. Next, consider your other investments, such as stocks and mutual funds. Plan on living longer so you don't underestimate how long you will need your money to last. A general rule of thumb recommends withdrawing 4% of your assets each year in retirement to make your money last through your lifetime. While Social Security provides a strong foundation, it was never meant to be the sole source of retirement income. Think carefully before choosing an early retirement and a reduced benefit. Investigate immediate fixed annuities as another source of guaranteed income. And consider consulting or working part-time to supplement your retirement funds.

Take action:

• Estimate your Social Security benefit.

9. When in doubt, ask for help - know where to seek guidance and what questions to ask a financial professional

Dreaming about your plans for the future can be fun and excited. However, taking the right financial steps to get there can be confusing and complex. As today's demands on both your time and money grow, you may want to turn to a professional for help. But before you select one, it's a good idea to understand the different types of professionals, their credentials, how they get paid and how much they charge for their services. Some financial professionals use titles that sound official but do not require any special certification or training. Be an informed consumer before you enter into a relationship with a financial professional.

Take action:

• Find out what questions you should ask before engaging a financial professional.

10. Take action today

You've made it to the tenth step! We encourage you to take some of the steps outlined above to improve your financial situation. Commit to doing at least one step immediately.

Take action:

• Order copies of our ten tips doorhangers to share with family and friends.
• Order tip sheets on a range of financial topics.
• Join our online community and share your saving and investing tips with others.