In Your Fifties With Inadequate Retirement Savings? Here's Your Plan

Last Updated Jul 15, 2010 6:18 PM EDT

If you're in the "better half" of your life and your retirement savings consist of nothing more than a baseball card collection and a few savings bonds, don't fret. Millions of baby boomers have failed to save enough for retirement, and they're looking for a better solution than the one chosen by Sol Roth, the character played by Edward G. Robinson in the 1970's science fiction movie Soylent Green.

(If you didn't see Soylent Green, Sol Roth chose a beautifully choreographed assisted suicide, which was encouraged by authorities in order to make room for the burgeoning population. The world was so nasty that this solution was welcomed by many older citizens. I'm confident we'll have a better future!)

Here's a better plan for Sol and the millions of boomers who are worried about their futures:
  • Work until age 70. If you take care of your health, there's a good chance you'll live to 90, giving you 20 nonworking years to enjoy your retirement.
  • Start your Social Security benefits at age 70. Waiting until then maximizes your lifetime income.
  • Get serious about taking care of your health. Improve your diet, exercise, and stress management. And if you smoke, quit. These steps will help minimize your medical bills and ensure that you'll be healthy enough to work until age 70.
  • Refinance your home with a 15-year mortgage. Take advantage of the fact that interest rates are now at an all-time low. This leaves you mortgage free by the time you retire. Note: If you already have a low interest rate, you might be better off just paying extra on your mortgage each month, so you'll be debt-free by 70.
  • Start saving like crazy. For instance, if you save $10,000 per year for 15 years and earn 6% per year, you'll accumulate more than $230,000. This could generate an annual lifetime retirement income of between $10,000 and $15,000, depending on your drawdown strategy.
  • Develop your support network. Get closer - geographically and emotionally -- to your children and other relatives. Make lots of friends. Your social support network will be invaluable in your later years for a number of really important reasons.
  • Be open to creative housing options and other ways to reduce your living expenses. The "Golden Girls" solution might save you lots of money and could improve your social life.
So there you have it: a game plan to make the best of your retirement years. But while it's easy to understand, it's a lot harder to make happen. There are lots of details involved, but the above links will get you started. They might involve making big changes in your life. But given the stakes -- how much you'll enjoy your rest-of-life -- they're well worth the effort

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  • Steve Vernon On Twitter»

    View all articles by Steve Vernon on CBS MoneyWatch»
    Steve Vernon helped large employers design and manage their retirement programs for more than 35 years as a consulting actuary. Now he's a research scholar for the Stanford Center on Longevity, where he helps collect, direct and disseminate research that will improve the financial security of seniors. He's also president of Rest-of-Life Communications, delivers retirement planning workshops and authored Money for Life: Turn Your IRA and 401(k) Into a Lifetime Retirement Paycheck and Recession-Proof Your Retirement Years.

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