As the New Year begins many of us will be thinking of our futures. We will look back and be proud and happy that we survived the last year and will look ahead to what 2011 might hold. All of our stories will be different and short of saying "I want to win the Lottery", most of us will have dreams and aspirations above and beyond being able to keep our job and support our families.
Here is one thing that you should be thinking about more than ever, regardless of your age...retirement. Many baby boomers who were brought up to live day-to-day, rather than to plan for their future, are finding that they don't have enough to retire on. For some, that may be true, but in all actuality, most baby boomers live above their means and if they are willing to keep their feet planted a little more firmly on the ground, most can retire and live comfortably or can at least go to working part time as they reach the age they can draw Social Security.
Ah-that word-Social Security. You know, it was never meant to be a full retirement income. It was meant to supplement your retirement income either from pensions or investments. So, no, you can probably not live well on Social Security, but it will probably still be around when you need that income supplement in your golden years. Don't expect it to keep pace with inflation though. A cost of living increase for Social Security recipients has been non-existent for the last couple of years and seems to be a favorite place to curb government spending. No, it's not right and yes, it is sad, but that's life and unless major changes take place in Washington, we will be footing the bill for "bridges to nowhere" instead of helping to support our aging.
When it comes to retirement, there are a number of things that you can do to plan for that time in your life. If you are young, you may think you have plenty of time, but take it from an oldie but goodie, it arrives quicker than you think. So, save for your retirement like you save a down payment for a house, for a car or like you save for your son or daughter's college education. Make it a part of your budget and one place that you cannot give an inch. Put the money away or invest it wisely and leave it alone, even if it means you have to wait to buy that house for a while. (A hint: if you look at where the housing market is today, it is much worse off than the stock market and will probably take longer to recover. Some people have lost 50% of their home's worth...so real estate may not be the wisest investment. It may be cheaper to rent and to put the money you save on home maintenance into a good IRA or increase your contributions to your 401K.)
If you are not young, then do everything in your power to position yourself for retirement. And if you don't see that happening, don't give up hope. Instead look at semi-retirement. For some people baby steps will be necessary to survive their retirement years. So, don't kick yourself in the butt and "sit in the garden and eat worms". If all you can do is a little, then that's what you do. For example, make a decision to spend cash. In other words, if you can't afford it, then you don't buy it. And, while you're doing that, make a commitment to pay down your high interest credit cards. Start with the cards or loans with the highest interest first and make double the monthly payment if you can. It may take 3 years, but once you pay that off, then you can take that money and put it towards the next card or the next loan and as you position yourself better, you can put the money you are not spending on debt each month and either increase your 401K contributions or look at mutual funds or an IRA. And time just seems to fly and before you know it you are not only debt-free but you can take your honey out to dinner and a movie once in a while and not worry about "robbing Peter to pay Paul" because you decided to splurge. And...best of all...you will have the leeway to put money away for a rainy day AND for your retirement.
Comfortable retirement is not a totally illusive dream. Even people already in their 50s can do some really positive things to make their retirement years easier...and yes...even enjoyable.