Eight Things To Do If You Haven’t Planned for Retirement

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Once people reach their 50s they finally see retirement on the horizon. They start envisioning that time when they can stop going to work and instead spend their days on the golf course, on the beach or with their families. Yet many people have not saved nearly enough for retirement by the time they are 50 years old. A recent survey by the Employee Benefit Research Institute found that 60% of workers born between 1946 and 1964 have less than $100,000 for retirement. In fact, 40% have saved less than $25,000.

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24/7 Wall St. interviewed retirement-related experts from brokerage firms, banks, retirement advocacy groups, and independent financial advisers. With their help, 24/7 identified the eight actions you should take if you have not prepared to retire.

Financial advisers generally recommend people begin saving for retirement starting in their 20s to take full advantage of compounding interest. Although the financial advisers who spoke to 24/7 Wall St. say it is very hard to give concrete estimates on how much should be allocated toward equities and fixed-income, they say it is best to cut risk as one approaches their target retirement age.

Not saving up enough for retirement used to be less of a problem. Workers in previous generations often received pensions from their employers, allowing retirees to know exactly how much money they would get once retired. But employers have increasingly shifted that responsibility onto the employees through 401k and other defined contribution plans.

These days, notes Joe Ready, executive vice president for retirement at Wells Fargo (NYSE: WFC), people get married and have children later in life than previous generations. This means that it is increasingly hard to save for retirement during the 40s and 50s because they still face heavy financial obligations — they are still paying off their mortgage, sending their children to college and so on.

The fact that many current retirees are living off pensions has conditioned younger generations to think their retirement might be the same, says Lule Demmissie, managing director of retirement for TD Ameritrade (NYSE: AMTD). “Face it,” Demmissie says, “your retirement isn’t your parents’ retirement.”

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Demmissie notes that people in retirement today are working until a later age and finding cheaper housing as they no longer can count on that pension that was once provided to employees. She also points out that while many people have never saved enough for retirement, the problem has become worse once the financial crisis took hold.

By the time you reach age 50, you should have roughly four times your annual income built up in retirement, according to Jean Setzfand, vice president for financial security for AARP. The best way to reach that goal is to start socking away money starting in your 20s. Still, if you are well behind on your goals by the time you reach your 50s, all hope is not lost.

These are the eight things to do if you have not planned for retirement.