You haven’t saved enough for retirement. Now what?

It’s a beautiful day out, you are at your work desk staring out the window, daydreaming about the day you no longer have to schlep in to work at 8am, and work the whole day. There are so many other things you would rather be doing. There are so many other things you should be doing. Yet based on the latest dollar figures on your retirement account, you will be chained to your desk for the rest of your life.

The sad reality is that on average, of those saving for retirement, American women between the ages of 55 and 64 have saved  69% of what their male counterparts have. This reality check becomes even more dreary when considering that today’s average 65 year old woman is expected to live until she is 88.8 years old.

So you are optimistically headed to become statistical average… but realistically you’re likely to end up somewhere below it. How do we stop this train wreck from happening!?

Step 1: Establish where do you stand vis-a-vis retirement right now:

a) How much do you need to retire?
b) How much do you have in your 401(k), IRA, Roth IRA, or retirement account?
c) What will you get through Social Security?

Step 2: Now that you’ve established how much of a shortfall you’ve got, lets look at how to work with what you have.  This is where you re-think your current debt and how to “bleed” less money:

a) What kind of debt do you have and how can you finish paying it? If you have any student loans left,  you probably know you have no way out but to pay them off. If you have a car loan- could you trade your car in for something equally reliable that is less expensive (and that you can hopefully payoff without incurring more debt)?
b) Housing: Can you downsize your house? Can you move to a less expensive neighborhood? This may sound drastic now, but think about the quality of life you want to lead in retirement.
c) Cut your living expenses: If you need ideas, check out Mr. Money Mustache. This guy has some very good (and some very extreme) ideas on how to cut costs and save. You can get a lot of inspiration from his website. Commuting, groceries and entertainment are just some of the areas where you can save. Budgeting is crucial- I love this website.
d) Can you negotiate a raise?  Are you underpaid and is there something that can be done about it? We can help you with this at www.salarycoaching.com.

Step 3: Re-think retirement. Your career… Act Two!

a) With life expectancy continually increasing, not many women of retirement age are actually ready to fully stop working and lounge around for another two decades. About half of individuals nearing retirement are choosing to get creative and start their own business- from baking cookies, to teaching yoga, dog-training or part-time custodial work. Either to pursue their passion, or due to financial necessity, people into their 40’s are getting entrepreneurial, and even becoming millionaires.
b) Brainstorm: Engage with your peers on what you should do next.  Sites such as Vibrant Nation or Encore.org are great sources to help you brainstorm and bounce off and explore ideas.
c) Read up on it. Nancy Collamer is a well known writer in the realm of second-act or semi-retirement careers. While I have not read it yet, the reviews for her late book are quite good: Second Act Careers: 50+ Ways to Profit From Your Passions During Semi-Retirement.

While it might be a little late to make up for those unsaved dollars in your retirement account, it’s not too late to think about your next steps. What would your second career look like?

Kathleen Barretto