25% of Baby Boomers have not saved anything for retirement. Actually, 34% of all adults have no retirement savings. Almost 70% of adults have less than $100,000 in any retirement savings.

Look at this problem in a different manner. According to the Employee Benefit Research Institute, nearly half of all people close to retirement now (those ages 56 to 62) will run out of money if they retire and live another 20 years. Do I have your attention now?

We cannot continue to play the ostrich. And if you have listened to the news, you know that sooner or later the Social Security payments will change (and no, they won’t go up).

Making a budget and sticking to it is difficult enough. Planning for retirement is even harder because of the unknowns:  how long you’ll live; what kind of expenses you might run into; how the investments you have will perform; and the minimum amount of money you can live on (especially when you want to travel and enjoy life).

Have you been in the vicious circle of spending, procrastination, and–as the finish line draws near–DENIAL? Maybe now is the time to hit the panic button. You do need a plan and you need it NOW.

The Social Security Administration says the average monthly Social Security check was about $1,177 at the beginning of 2011. Some experts say you need 75 to 85% of your pre-retirement income to maintain your lifestyle. Others claim your expenses actually go up during retirement unless you make significant changes. For argument’s sake, let’s say your income needs are $1800 per month. That means your retirement fund or savings has to make up the difference of $623 per month (for a 20 year span). Can they?

I hope you are not among the percentages I rattled of earlier. If you are, all is not lost but some big changes may be necessary. The changes I will mention can also help those who have saved for retirement make their money and their preferred lifestyle last longer.

Weigh Your Home Options

If you insist on staying in your home, a reverse mortgage is not something I would favor. To me that is a last resort type thing. But maybe a sale to a family member and leaseback is a good move.

Another possibility is to rent out a room in your house. Maybe a college kid or single mom would be perfect for you as an empty-nester. Just screen the prospective tenant well. You need someone nice and stable, not another headache or reclamation project.

Work Longer

Sixty-five is the number chiseled into popular consciousness as the age for retirement. I turn 65 this year but don’t get full Social Security until I am 66. My Social Security check will actually increase if I work past age 66, at the rate of about 8% a year. Wouldn’t it be better for YOU to make the decision to work longer than for Congress to make that decision for you? They are certainly considering extending the retirement age.

Besides, working longer gives you more time to remove debt and to save for when you do retire. You should be using the additional catch-up retirement plan dollars to salt away more after you hit age 50.

Work Twice as Hard

A second job is a chore unless it is something you like to do, so be creative with your talents. Can you paint a wall, grow flowers, create crafts that others will pay money for, or teach something you are good at?

All of these are no pain, no gain suggestions. They aren’t sexy, but neither is a lack of retirement savings. You are at the stage where you need to roll up your sleeves now.

I must give you a word of caution on investing to make up the difference in your lack of savings. One thing the professionals universally agree on is that bumping up the risk level on your portfolio is never the answer. As you age, you should pare down the risk levels of your investments. Big potential returns have an opposite side–big potential for loss. You don’t want to lose everything you’ve worked for in one go. That could be the most crushing blow to your enjoyment of your retirement years. So instead, get a plan and get started.

Get Rid of Debt

I am one of those rare birds that believes if you incurred the debt, you should pay it off. Let me just say that the debt you have should be retired before you are. There are credit services that can help you negotiate better terms and sometimes give you a little debt forgiveness. Use them if you must, but I think you will sleep better at night knowing that you repaid the debts you incurred.

Dramatically Cut Your Expenses

If you have not saved enough, eating at restaurants fewer times a week isn’t really going to help you save unless you drastically cut down the amount of restaurant eating you do. You may have to admit that you cannot support your child (or children) all the way through college or grad school. Maybe you could give your grandchildren more time and attention rather than presents. Actually, they might appreciate you more than things, and that has to be good! You can do without that new car and new, trendy clothes. Take less expensive vacations. You can find ways to shave off expenses if you are serious about it.

Consider Downsizing Your Home

Housing may be your biggest expense, but also your biggest single asset. I understand that now is not the greatest time to sell a house. Maybe you can spruce up the paint and work in the yard for a year or so until things are a little better, but downsizing your home has the potential to save you the most money. Selling a bigger home and buying a smaller home or condo for cash can help you retire some of that debt and reduce your expenses.

Remember, if you need advice, you can always talk to us here at River City Bank. CPAs are good; financial planners are not only for the rich. Financial Advisors and brokers have some good information. Your friendly neighborhood trust officer works in these areas daily. Talk to one or more of these advisors for more information about your retirement savings plan.