Fidelity Investments, which is the largest provider of retirement plans in the country, has projected retirement readiness among a broad-based sampling of Americans and concluded that 38 percent of households of all ages are likely to face retirement without enough money to live on.
If you think that might be you, Fidelity offers these five steps to get back on track.
- Invest more aggressively. Fidelity estimates that 21 percent of retirement savers are investing too conservatively because they are avoiding exposure to stocks. Putting more than half your money in stocks can make your retirement planning more nerve-wracking in the short run, but over the long haul, the earning potential is much greater.
- Buy an annuity. Annuities aren't popular -- only 17 percent of retirees are using one to provide guaranteed income, Fidelity says. But if you're going to come up short on money, it can be an important tool. That's especially true for the retiree who lives past age 85. Social Security, which predicts age spans, says at least 50 percent of people will live longer than that.
- Consider tapping the value in your home. Seventy-two percent of the people whose situation Fidelity examined own a home, and 32 percent of those homeowners have no mortgage. Fidelity suggests that people with this kind of equity who need more money to pay the bills should either sell their homes and downsize or rent.
- Work longer. Most people say they plan to retire at 65, but if they were to delay retirement just two more years, they would have a much more comfortable rest of their lives. Even working part time can make a big difference, Fidelity points out, saying it is a particularly good decision for boomers facing an income shortfall with no time to save more.
- Increase how much you're saving. On average, the people whose accounts Fidelity analyzed were putting aside $3,500 a year in their workplace retirement accounts. At that level, they weren't saving enough to get the full employer match, nor were they maxing out the available income tax deduction. That's just walking away from free money.