The Employee Benefit Research Institute conducted a telephone survey recently and asked people age 25 and older how they felt about their retirement finances. The responses were interesting and confusing. As the Wall Street Journal reported, it conveyed a sense of false hopes for many Americans. Consider:

• Two-thirds of those surveyed said they felt confident about their retirement income preparations but…
  • 64% said they or their spouse had saved for retirement
  • 57% said they or their spouse are currently saving for retirement
  • 44% said they or their spouse had tried to calculate how much money they will need in retirement
  • 32% are confident Social Security will provide sufficient benefits
  • 22% said they had saved $100,000 or more for retirement
  • 19% stated they had received advice from a financial advisor

So the survey results above don’t match up with the expressed optimism and confidence. What gives? Are we fooling ourselves into a retirement death spiral or are we afraid to face the reality that the boomer generation just hasn’t done a good job of preparing for retirement?

In either case, it’s time to get over the “woulda, coulda, shoulda” thinking and start looking at what we can do right now, today. I am sharing my “Ready List” to quote my old college football coach, Bill Walsh. Just as a football team develops their Ready List to prepare for an opponent you too need a “Ready List” – the retirement income planning “plays” you can “run” right now depending on what opponents you are facing right now which could be one or more of these:

1. I haven’t saved enough
2. I’m not contributing to my company 401k or other retirement plan
3. I don’t understand how Social Security works
4. I spend too much money on “stuff” instead of saving for retirement

And there may be more. But let’s start where we are and go from there. Get off the “Someday Isle” and let’s look at these possible solutions – my “Ready List”

1. Start with the end in mind – Sit down with a CFP (Certified Financial Planner) and figure out how much you have saved right now. Together you can uncover the retirement income “gap” and discuss solutions to help bridge the gap with one or more of the Red Line Solutions discussed below.
2. Look at your expenses – We need to look at what you spend now and what lifestyle you want when you retire. Most people want the same or as close to the same lifestyle that they have pre-retirement. So we typically use 70-80% of your pre-retirement expenses in retirement as a starting point.
3. Don’t forget Social Security – This can make a huge difference in your retirement income projections. It’s a guaranteed annuity with inflation protection. We need to figure out when the best time to start taking benefits will be. Don’t assume it’s at age 65. More on Social Security here.
4. Find the gap – I use a terrific program called Retirement Analyzer. Once we account for your assets, expenses, Social Security and other potential sources of income we can determine when you will or won’t run out of money. We call this the Red Line analysis. The Red Line is when you will run out of money. We want to push it beyond age 100 just to be safe – make it disappear!
5. Bridge the Gap – Depending on where/if your Red Line shows up, for example, at say age 75, then we need to come up with Plan B. We call these the Red Line Solutions. What are those? Here are some examples:

• Modify when you start taking Social Security
• Work longer
• Work part-time in retirement
• Reduce expenses in retirement
• Increase contributions to retirement accounts
• Sell an asset

I explain these Red Line Solutions in more detail here. Beating yourself up over what you haven’t done won’t get you any closer to an enjoyable retirement. Taking action now will. You don’t have to do it alone. Work with a professional advisor and get started on your retirement income plan. That’s the only one that matters.

Time Out! What is the number one roadblock to your retirement income goal? You can leave a comment here.