By Mitch Strohm
The road to a comfortable retirement isn't always smooth. In fact, it can get pretty bumpy along the way. Retirement planning is no easy task, but with the right tools and the right planning, you can dramatically increase the odds of long-term financial security.
You will have to make some tough decisions. And when it comes to saving over the long term, there are plenty of obstacles. Expenses such as paying for education, buying a home or purchasing a vehicle often take precedence over contributing to a retirement account.
If you feel like your long-term savings are inadequate, you are not alone. A lot of Americans simply are not saving enough.
According to a 2012 Retirement Confidence Survey by the Employee Benefit Research Institute, 60 percent of workers say they have less than $25,000 in total savings and investments. And 34 percent reported the need to dip into savings to pay for basic living costs in the past year.
Many people who plan to retire soon won't have enough saved to feel secure when they stop working, forcing them to work longer, cut expenses or find additional sources of income.
Still, there are plenty of ways to ensure security in retirement -- from catch-up contributions to delaying your Social Security payments until you are eligible for the maximum payout.
That is why it's crucial to know all of your options. There is a wealth of information to contemplate when managing your nest egg.
How much will you need?
Only 42 percent of American workers report having taken the time to complete a retirement needs calculation, according to the Employee Benefit Research Institute. Retirement needs calculations are crucial to a comfortable retirement.
A basic retirement calculation can help you determine how much money you will need in retirement and how much you need to save now to meet that goal. Bankrate's retirement calculator can give you an idea of how much you will need to retire.
Keep in mind that the amount of money you will need in retirement also largely depends on the type of lifestyle you want during your golden years. Many advisers urge people to save enough so they'll have an annual income stream that is 85 percent of the worker's pre-retirement income. But if you have the house and car paid off, you may not need as much.
On the other hand, if you want to travel a lot, you may need more. That means you will need to plan for the type of lifestyle you want to live.
Start saving now
If you are young, you have a big advantage. The power of compounding interest is on your side. You can also take more risk with your money, which tends to yield higher returns. But that doesn't mean older workers are stuck. The Internal Revenue Service allows catch-up contributions to your defined benefit plan if you are 50 or older.
Just remember that you can, for the most part, control three variables to keep your retirement on track: the amount you save, the age you retire and the percentage of income you live on in retirement.