I read an article in USA Today that appeared on March 18th. The headline screamed, “A third have less than $1,000 put away”. My immediate thought was that these are boomers who have given up on the idea of retiring any time soon if at all. My second thought was that these people just don’t understand the whole retirement income picture.

I can’t help with the first group but the second group is right up my alley. The force that will drive boomers to retirement success is education – learning some basic information about how to plan for a successful retirement. Forget owning the vineyard. I’m talking about not outliving your money!

The USA Today article goes on to explain that 60% of workers have less than $25,000 saved for retirement. Only 44% of those surveyed say they have tried to calculate how much money they will need to save by the time they retire. The survey concluded that those who have done the “calculations” tend to have higher level of savings. If you have been following my blog you know what calculations they are talking about. If you don’t, go here to learn more.

The biggest reason cited for not saving enough was cost of living and day-to-day expenses. Another telling statistic from the survey is that many people surveyed do not have a retirement plan such as a 401k or IRA that they can contribute to.

There are a couple of conclusions one could draw from the survey results:

1. Many people have just given up on the idea that they can stop working someday and “retire”.
2. People think that Social Security and/or an inheritance will appear and solve their retirement savings problem.

Both of these conclusions are dangerous so let’s focus on what people can do today, right now, to start bridging the gap between those who are confident they can retire and those who feel there is no hope of ever being able to stop working.

So what can you do if you find yourself with little or no money saved for retirement and you are 40+ years of age? Here is my list of things you can and must do right now:

1. Sit down with a Financial Advisor and figure out exactly where you are. How much have you saved, what is your income and current expenses? Don’t try this alone.
2. Put a budget together. A good financial planner will be able to help you find a few dollars to invest toward your retirement regardless of how strapped you think you are. Get more info on budgeting here.
3. Find out what your “retirement gap” is. That is the difference between what you need to retire at a point in the future and where you are headed now. I call it your “Red Line” – that point where you will run out of money in retirement unless you make some changes now.
4. Discuss the “Red Line” solutions with your advisor. For a more in-depth review of these “Red Line Solutions” review my blog post here.
5. Decide on your plan of action to bridge the Retirement Gap. It’s never easy but the good news is that there is hope.

To review the USA Today article and survey results from the Employee Benefit Research Institute and Greenwald and Associates click here. My regular readers have heard me say this many times before but it’s a drum I will keep beating, “The best time to plant a tree was 20 years ago. The next best time is today.” And so it is with your retirement income planning. You can’t go back and start over. So let’s get started right now!

Time Out! What is your biggest concern about retirement? You can leave a comment here.