We all know we’re supposed to plan ahead for retirement, reduce debt, and start saving early. But how many actually do that? According to the Employee Benefit Research Institute, 36% of those polled admitted to being lax about saving for retirement. And 22% reported that they’d have to postpone retirement until later.

A Fast Track to Avoid a Cliff Retirement

It’s never too late to start saving money. Even for those in their 50s and 60s, there’s still time to recover without heading for a “cliff retirement,” but time’s a-wastin’. You’ve got to put things on a fast track. Take advantage of the years left before retirement. Use the next five to ten years to accumulate more savings, more investments, and reduce your debt.

How much annual income will you need?

Calculate how much money you’ll need annually during retirement. For instance, if you currently earn $100,000, you might plan on a retirement income of between 80% to 85% or $80,000 to $85,000 per annum. If you earn $50,000 per year, that means $40,000 to $42,500, etc. Obviously, this means understanding your cash flow needs, both now and in the future.

Change those spending habits

How much could you save by combining phone, cable, and Internet? Can you economize with careful meal planning and eating out less?

Since we’re creatures of habit, changing behavior and lifestyle is easier said than done. But if you make an action plan and set a target, you’re more likely to reach your goal with small incremental steps. For instance, you could increase your 401(k) contribution by 1% and then repeat that periodically. That gives you time to gradually adjust to the slight decrease in income.

There’s an App for that!

You’ve heard the expression, “There’s an App for that!” Well, did you know that there are phone applications for money management that call attention to your income and expenses? I believe you can create the things you give attention to. And this app could be the mental trigger you need to make a big difference in reducing your debt.

How much can you expect to receive?

Most people receive retirement income from three sources: Social Security (SS), pensions, and their investment portfolios. Make an inventory list of the total amount you expect from all income sources—pensions, accrued stock options or restricted stock awards, *SS (especially the spousal benefit), retiree medical benefits, etc. Research your best options for maximizing future income. I recommend starting a financial plan at least five years ahead of retirement to allow time for fine-tuning your strategies.

Breaking the debt cycle

Credit cards are a convenient and necessary evil. If you have multiple cards and no discipline, consider getting rid of all but one card. This makes it easier to review your expenses and identify things that you didn’t really need. Gradually start paying down your balance, and then don’t charge beyond your ability to pay the full amount every month.

Don’t panic!

Panicking or hiding your head in the sand won’t fix anything. Take a deep breath. Sit down with a trusted financial advisor to objectively assess your situation. If there actually is a shortfall in retirement savings, there are many immediate steps that can be taken, starting with some of the tips mentioned above. It’s often psychologically challenging, but it’s doable, and more importantly, it’s essential.

New money management habits can make a huge difference in your long-term financial freedom.

*To determine the amount you can expect in SS payments use the calculator on the Social Security website, www.ssa.gov, to help you estimate your benefits.

The information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete. Any opinions are those of Judith A. McGee and not necessarily those of Raymond James.

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