Boomers: 5 steps to get your retirement on track in 2012
Get 2012 started on the right track by taking steps to improve the odds that you'll live long and prosper in your retirement years. But don't let the following suggestions overwhelm you. Instead, just pick one of these steps right now and start moving in the right direction. After a few months, select another step. Continue through the list, and by the end of 2012, you'll be well on your way to significantly improving your retirement years.
Step No. 1: Make changes to improve your health. This step actually has a higher priority than saving more money. Why? You can significantly reduce the odds of expensive and debilitating illnesses at any age. And because most boomers will need to work some in their retirement years to make ends meet, these steps will help you be physically able to work.
Improving your health doesn't need to cost you anything -- all it takes is determination. Most boomers would benefit by increasing the amount of exercise they get every day. If you're just getting started, take a brisk walk around your neighborhood after dinner for 30 to 45 minutes. Take your spouse or partner, too, if you have one. If you're already exercising, good for you! But I bet you can find ways to improve your routine by making sure you get all the kinds of exercises (stretching, cardio, strength training and balance) that are necessary to keep you fit in your later years.
You should also think about reducing the amount of fatty foods in your diet -- including most meats -- and increasing the amount of fruits, vegetables and grains you eat. The added bonus? Cutting out meat and consuming more fresh fruits, vegetables and grains should save you money at the grocery store, since these foods usually cost less than meat. This will allow you to save more for retirement, so you'll be achieving two goals for the price of one.
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Step No. 2: Investigate how you might continue working. Most boomers don't have the financial resources for a traditional retirement, where you don't work at all. But that doesn't mean retirement needs to feel like a prison sentence. Find the kind of work you might enjoy, and reduce your work hours to give you more time to do what you enjoy in life. You don't necessarily need to make the same amount of money you're making today; you might need to make just enough to cover your living expenses. By earning enough to cover daily expenses, you can leave your savings untouched so they continue to grow until you're fully retired.
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Step No. 3: Find ways to spend less money. In numerous surveys, retirees often report that the strategy they use the most to make ends meet in retirement is to spend less money. Many people find that buying more stuff doesn't make them happier. What does make their lives better is being with friends and family, and pursuing their interests and hobbies. Those activities don't need to cost much money.
If you're approaching your retirement years, you can prepare for them by focusing on spending "just enough" to meet your needs and be happy. The added bonus? You'll save more for your retirement years, making this a win-win step.
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Step No. 4: Increase your retirement savings. You know a list like this wouldn't be complete unless I mentioned saving more money for when you eventually do retire. If you participate in a 401(k) plan at work, bump up your savings by 1 or 2 percent of your pay. It won't ruin your life -- most likely you won't even miss the money. And you'll learn how to get by on a lower income (see Step No. 3 above).
Better yet, calculate how much money you need to retire comfortably using an online calculator. Many 401(k) plans at work give you access to such a calculator, and that's a good place to start. If you don't have such a calculator available, try using a calculator that are available for free on the web. The links below contain suggestions:
How to choose the right retirement calculator for you
Top tips for using retirement calculators
Step No. 5: Take the time to really plan your retirement. You're planning for the most important time in your life -- the rest of your life -- and that could last 20, 30, or even 40 years. It makes sense that you'll need to spend many hours to do it right. To help you out, I've prepared a 12-week online retirement planning course that shows you all the steps you need to take regarding your retirement money, health and lifestyle. The best news? It's free.
Retirement planning: How to do it right
One of the best ways to plan for your retirement is to get your spouse or partner involved, or form a small study group with friends. This way, you can divvy up the research and tasks and help each other stay on track.
You'll feel much better about your future if you take charge now. And there's no better way to get started than by taking one of these steps during the first few weeks of 2012.
Steve Vernon
View all articles by Steve Vernon on CBS MoneyWatch»
Steve Vernon helped large employers design and manage their retirement programs for more than 35 years as a consulting actuary. Now he's a research scholar for the Stanford Center on Longevity, where he helps collect, direct and disseminate research that will improve the financial security of seniors. He's also president of Rest-of-Life Communications, delivers retirement planning workshops
and authored Retirement Game-Changers: Strategies for a Healthy, Financially Secure and Fulfilling Long Life and Money for Life: Turn Your IRA and 401(k) Into a Lifetime Retirement Paycheck.
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