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Have You Saved Enough to Retire?

Dave Bernard

Wouldn't it be nice if you had enough saved so you could retire if you wanted to? According to Fidelity, you will need to put aside eight times your ending salary if you hope to fund your lifestyle for a 25-year retirement. If you don't have that much set aside, you are not alone. More than one-third (36 percent) of people over age 55 haven't saved more than $10,000 for their second act, according to a 2013 report from the Employee Benefit Research Institute. If you are in that group, the reality is that you may never be able to retire.

Everyone wants to retire or least entertain the option to do so. What retirement will look like varies depending on individual preferences. To most, that promise of getting away from the stress of the job to focus on pursuits that interest you sounds pretty darn good.

What do you need to do to have enough to retire? And exactly how much do you need?

If you are 55 and have $10,000 saved for retirement, chances are you will not come close to saving eight times your ending salary unless you win the lottery. Hopefully your retirement fund is in better shape, in which case, here are some things you can do to help the cause.

Be realistic. As you look ahead to the retirement lifestyle you hope to enjoy, what are the must-haves you feel will provide the core for a fulfilling retirement? Take some time to consider and identify the most important ingredients for your happiness-to-be. Then figure out what you need to get there. If retiring in place is your dream, look realistically at the numbers to see what you need to do to stay. If traveling is your thing, what does your typical trip look like? Depending on how extravagant, you can calculate how many ventures you can afford to enjoy. Although retirement is your time to do what you want, sometimes you may have to do without.

Take an honest look at the lifestyle you hope to live. Is it doable based on your savings and investments? If not, the retired you may have to cut back in some areas. Although tough choices may have to be made, the alternative could find you barely scraping by each month -- or worse, running in the red.

Once you have determined realistic expectations for retirement, do your best to stick to your goals and live within your means. A frugal retirement does not require sacrificing quality experiences, just being selective with your choices.

Be willing to make trade-offs. You may be forced to give and take as you plan your future. Prioritizing can help you create a clearer picture of where to focus your attention. Once you have your top hit list, take a closer look to see what you might be willing to sacrifice to realize those must-haves. If you want to make two major trips each year, perhaps three-star accommodations can replace five-star. Maybe you can get by with one car rather than two, effectively slashing your insurance, gas and maintenance costs by half. Take a close look at your situation and see where you can cut back to subsidize those higher-priority activities. Everything seems to be more expensive these days, and with a limited budget, something has to give. As Benjamin Franklin said, "Beware of little expenses. A small leak will sink a great ship."

Be prepared. Even with all your ducks in a row, the retirement you ultimately live will likely not go 100 percent according to plan. Expect the unexpected. Children may need to move back home, the economy may unexpectedly head south and you never know how your health will hold up in the coming years. How do you prepare for the unexpected? The answer is save more. Even if you think you are ready, a little additional cushion can go a long way in an emergency. Is adding to your nest egg sufficient reason to delay your target retirement? Each of us will have to answer that question based on our individual circumstances.

Be adaptable. Even if you are realistic in your expectations, even if you make wise trade-offs, even if you are as prepared as you can be for the unexpected, you will on occasion have to roll with the punches. Routines you have incorporated into daily life may have to be adjusted as physical and mental changes arise. Some degree of independence may have to be sacrificed in the interest of safety. Patience can be even more of a virtue as things take longer to get done. Don't be too proud to lean on those who offer to help. Don't be too stubborn to learn from your mistakes. But don't be too afraid to step out and try new things. After all, this is your retirement. You can't afford not to enjoy it to the best of your capabilities!

Dave Bernard is the author of "I Want To Retire! Essential Considerations for the Retiree to Be". Although not yet retired, he focuses on identifying and understanding the essential components of a fulfilling and meaningful retirement. He shares his discoveries and insights on his blog Retirement-Only The Beginning.

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