I recently ran across a post by sometimes-FCN-guest-poster Richard Barrington over at Money Rates. In it, he talked about ways to overcome the general lack of savings that is threatening the retirement dreams of many Baby Boomers.
You can read the full article on Baby Boomer Retirement for more details, but here are his six tips:
- Work longer
- Diversify your investments
- Use laddering to manage interest rate risk
- Save on bank fees
- Actively shop for the best rates
- Monitor your progress
To these, I would add that you should consider making deep spending cuts to allow for an increase in your savings rate. When combined with working longer, this will give you the best chance of digging yourself out of your retirement savings hole.
Obviously, diversifying your investments, seeking out the best rates, etc. also have their place, but those things will only get you so far. You really need to ramp up your savings rate and/or save for longer (thereby shortening your retirement) if you want to make a meaningful dent in the problem.