Run the Numbers


Fewer than half of Americans have calculated how much they need to save for retirement. Even though we are consistently prodded with advertisements and resources urging us to estimate how much we will need, Americans are still choosing to ignore the advice of financial experts.

LIMRA reported results from a survey they conducted this year inquiring Americans about their contributions to a retirement plan. They found that nearly half of those surveyed were not making contributions. Another astounding statistic is the amount of savings and investments that Americans reported in 2012. In the Retirement Confidence Survey conducted by the EBRI, they found that nearly a third of older workers had less than $10,000 of savings and investments.

When you have less than $10,000 saved, planning for retirement would seem like an impossible task. It's no wonder so many Americans are foregoing making any plans. If you make the decision to calculate your retirement savings needed and see a massive shortfall between your savings and retirement savings needed, don't be discouraged. There are still options if you find yourself in this situation.

Make realistic goals

While it is important to consult a retirement calculator to estimate your retirement expenses and expected healthcare costs, it is more important to base your savings goals on your own budget. Plan to save a realistic amount that fits within your budget.

Change your lifestyle

If you can't afford to fund your lifestyle in retirement, then you probably can't afford it right now. Evaluate all of your expenses and see where you can make cut backs and increase your personal savings and retirement savings.

Work longer

Delaying retirement is your first step to reaching your goals. This will allow you to contribute more to your savings, decrease the amount of years you need to fund your retirement, and increase your social security benefits. Click here to read are special report, Evaluating the Best Time for You to Begin Taking Social Security

Pay yourself first

Don't put your savings at the bottom of your priority list. Concentrating on paying off your debt and ignoring your savings will never fill the gap between your goals and current savings. Make an effort to simultaneously pay your debt as well as write yourself a paycheck every month to stash away.

It's not too late

Although waiting to save later in life is not the ideal situation, it does not mean that you can't make a significant dent on your retirement savings and improve your quality of life beyond your years of working. Take advantage of catch-up savings in tax-advantaged accounts. Click here to see the contribution limits for 2012.

While it may seem impossible to save and plan for retirement when you have so little to start with, there is still hope for creating goals and retiring confidently with a plan. If you delayed saving, you may have to make some drastic changes, but make sure to make goals you can realistically reach! Click here to start using our My Financial Plan app to help you get started making your goals.

The intent of this article is to help expand your financial education. Although the information included may be relevant to your particular situation, it is not meant to be personalized advice. When it comes to investing, insurance and financial planning, it is important to speak to a professional and get advice that is tailored to your unique, individual situation. All investments involve risk including possible loss of principal. Investment objectives, risks and other information are contained in the Snider Investment Method Owner's Manual; read and consider them carefully before investing. More information can be found on our website or by calling 1-888-6SNIDER. Past performance is not indicative of future results.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

This article appears in: Personal Finance , Retirement

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