Retirement Planning: 5 Warning Signs You're Off Track

Last Updated Nov 11, 2010 5:16 PM EST

There's no doubt that retirement planning can be challenging. You need to make your IRAs, 401k plan, and other retirement savings generate a lifetime retirement income, and also prevent getting wiped out by bills for medical and long-term care expenses. But it's a challenge we often ignore at our peril: As we get caught up with the issues of day-to-day living challenges, we lose sight of long-term goals and forget to plan for the future.

To help you keep on track to have the kind of retirement you really want, here are five warning signs that your retirement planning needs some attention:

  1. You don't have a ballpark idea of the amount of retirement savings you need in your IRAs and 401k plan to generate the retirement income that you need. Most people underestimate how long they'll live and how much money they need in their IRAs and 401k plan.
  2. You don't have a good understanding of the financial resources you actually have. At any age, it's a good idea to compile a retirement planning folder -- on paper or online -- which contains your annual statements from Social Security, your IRA and 401k account statements, any booklets from your employer that describe your pension or retiree medical benefits, and any other resources you'll need to generate retirement income and protect against medical risks.
  3. You tell yourself you don't need to worry too much about retirement planning because you'll just keep working. Unfortunately, there are two flaws with this thinking. First, you might not be able to find work in your later years. And second, there will come a time when you're no longer physically able to work and will need to rely on financial resources.
  4. You haven't thought very much about what you'll do or where you'll live in your retirement years. Even worse, you haven't discussed these issues with your spouse or life partner, if applicable. The people who do best in retirement have a rich social life, which can not only increase your enjoyment of life but improve your health and longevity as well.
  5. You're overweight, have high blood pressure, and/or have high blood cholesterol. These symptoms increase the chances that you'll incur a chronic, debilitating, and expensive condition in your later years, and decrease the odds that you'll be able to work. Healthy lifestyle choices can significantly reduce the odds of incurring these expensive conditions.
If you're planning to retire before age 65 -- the eligibility age for Medicare -- there's a sixth warning sign you need to pay attention to: You don't know where you'll get medical insurance, or how much you'll have to pay for it.
If you find yourself recognizing one or more of these warning signs, don't panic or beat yourself up -- it's never too late to start planning. The links to previous posts shown above and in the list below are good places to get started.

If you take things one step at a time, over the next few weeks and months, you'll see substantial progress. And having good plans in place will let you focus on what's really important -- enjoying your life!

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    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.