According to the U.S. Department of Labor, fewer than half of Americans have calculated how much money they will need to retire. Moreover, the average American spends more than 20 years in retirement, and so it's a good idea to do as much as you can to ensure that your golden years are both secure and enjoyable.
If you are like a lot of people, you rely on your employer's 401(k) plan for your retirement investing. If your employer offers a 401(k), you know that money is being deducted from your paycheck and put into a retirement plan, which is, of course, a good thing.
However, these days, having a 401(k) and then relying on Social Security isn't enough. That's why, when it comes to beginning to save for retirement, there's no time like the present.
Obviously, the closer you are to retirement the more money you'll need to set aside each month -- and saving means sticking to a budget. That can be tough in today's economy, when housing is costly, great jobs are at a premium and even older Americans are carrying debt borrowed or co-signed to help a child or grandchild pay for college.
Still, you should start revising your budget now, recommends Stephen Lovell, president of Lovell Wealth Legacy. Ask yourself: How do I spend money? Many of us think we have a reasonable idea of where we put our money, but unless you account for your spending, you may miss out by not putting away enough for a happy retirement.
Most investors limit their choices by relying exclusively on stocks, bonds and cash, Lovell notes. From 2000 to 2013, the stock market, for all its ups and downs, wound up roughly in the same place, around 1527. At a 2 to 3 percent investment cost per year, many investors, for all their efforts, lost money.
"I educate my clients by bringing their attention to the wide universe of investment types," says Lovell. "Results that are more suitable solutions are uncovered and then applied, for the client's benefit."
But don't worry too much if you've made a financial blunder. Two-thirds of Americans have made a significant money mistake somewhere along the way, says Jim Chilton, founder and chief executive officer of the nonprofit Society for Financial Awareness.
"One thing I always tell people is that you can't let your emotions get in the way when you are trying to do the right things," Chilton says. One of those errors could be giving too little thought to retirement. Social Security is designed as a supplemental income, not something that can replace your entire paycheck. Chilton says that's why you need to plan and save: to make sure you can lead the lifestyle you want in your later years.
When readying for retirement, don't forget to plan for possible medical or long-term care expenses, says Jake Lowrey, president of Lowrey Financial Group. "It's important for retirees, and anyone planning for retirement, to become educated about what the pitfalls are and what they need to do to avoid losing their life savings," he says.
There are some strategies to lessen the impact of long-term needs. Those include looking into VA benefits provided by the U.S. Department of Veteran Affairs, setting up a trust, and checking into a Medicaid compliant SPIA, which is a single-premium immediate annuity.
Be proactive about your financial interests before visiting a professional, Lovell advises. "Remember that 40 percent of retirees underestimate their life expectancy, according to an Ernst and Young study," he adds. "So if you don't want to run out of money, create your financial place to cover this extended retirement period. Then your odds for a comfortable retirement are improved."
So no matter your age, these experts agree that you should be saving and budgeting -- and investigating ways to make sure your retirement years are golden and not frightening.