4 steps for realistic retirement planning

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Face it: If you don’t plan for retirement, there’s a substantial likelihood that you won’t be able to retire at all.

About 18 percent of Americans think they’ll never be able to retire and expect to work until they simply can’t work any longer, according to a study by banking group HSBC.

Among those living alone — primarily because they are divorced or separated — the number of people who don’t think they’ll ever be able to afford to retire rises to 33 percent.

Hindsight is 20/20. Of those people who are already retired, 44 percent told HSBC that their retirement planning was inadequate, with 12 percent saying they plan to go back to work to cover their shortfall.

HSBC offers four simple recommendations that make sense for anyone who is planning for retirement:

Be realistic about what retirement will cost. HSBC says that 52 percent of people living in retirement are spending just as much money as they spent while they were still working and 17 percent are spending more. Even in old age, expenses may not fall because of the cost of medical and nursing care.

Don’t rush. About two-thirds who entered “semiretirement” say they wish they had worked full time for longer.

Consider family in your financial calculations. Nearly half of current workers say they will continue to provide some financial support to adult children and elderly parents after they retire.

Provide for more than one source of income. Utilize tax-advantaged savings at work and consider putting aside money outside of your workplace plan as well. Planning to take a part-time job or run a small business after retirement can also augment your income, and make life in retirement much more secure.

In general, HSBC says that people need to adjust their retirement expectations to mirror reality. “While some people still regard a comfortable retirement as a natural entitlement, for a large number of Americans this is no longer the case,” says Andrew Ireland, regional head of wealth management, HSBC North America.