fairwinds.org | wherever you are

Improvements in the economy have resulted in greater optimism and confidence from retirees that their retirement will remain financially secure. It has been a bumpy ride however. From 2009 to 2013, confidence levels were at record lows, according to the March 2014 Retirement Confidence Survey conducted by the Employee Benefits Research Institute. In 2014, those confidence levels rebounded. Retirees who are very confident or somewhat confident that they'll have a financially secure retirement increased to 67 percent.

However, the same study showed that 31 percent of retirees are not confident in the financial security of their retirement.

Into which half of this statistic do you fall? Will you run out of money during your retirement? If so, what can you do about it?

The good news is that you can take steps to boost your odds of enjoying a retirement free of money stress. However, to do this, you must first identify whether you've saved enough for retirement. Moreover, if you find that you have not, you must then take the sometimes challenging steps to change your negative financial situation.

Determining if you have enough savings

Before you can determine whether you've saved enough for retirement, you must calculate how much money you need each year.

Financial experts say that most retirees will need anywhere from 70 percent to 85 percent of their annual pre-retirement income to live comfortably after leaving the workforce. This varies, though, depending on the lifestyle you wish to live during your retirement.

If you want to travel the globe with your spouse, you'll need more money each year than you would if you are looking forward to relaxing with your grandchildren. If you want to help your children buy their first house, you'll need more savings than if you are planning to spend your days catching up on all that reading you missed while working.

At the same time, you need to calculate which of your expenses will change after retirement. You might no longer have to make a monthly mortgage payment. That is a positive. However, you might also need to spend significantly more on your health care. That is a negative. Maybe you'll drop life insurance and disability coverage or do away with one of your cars.

Next, you need to estimate how long you think you'll live after retiring. This, of course, is no easy task. In general, though, people are living longer today. It' s not unusual to live into your late 80s or beyond. Depending on when you retire, then, you might have 25 years or more left to live.

If you don't have enough

What if, after making these calculations, you determine that you have not saved enough for retirement?

First, don't panic. It is scary to come to grips with a lack of retirement funds. However, once you know you are in financial trouble, you can at least take steps to change your fortunes.

For instance, you might choose to sell your home. This can provide you with an immediate infusion of cash. Besides, if you downsize, you'll have to spend less time and money on maintenance, lawn care services, and snow-plowing companies. That can add up to significant savings.

You might also consider moving to a community that is more affordable. By living with lower gas, groceries and other regular expenses, you can reduce the monthly strain on your retirement savings.

Another key to a financially happy retirement? Reduce as much of your consumer debt as possible. You do not want to take credit card debt with you into your retirement years. Make sure, then, to do everything you can to pay off your high-interest-rate credit cards before you leave the workforce.

Working longer is another important strategy. If you can work past your full retirement age -- whether that age is 65 or 66 -- you'll have more time to pay off debts and sock away savings. You'll also boost the size of your monthly Social Security benefit. The longer you work -- until the age of 70 -- the larger your monthly benefit will be.

You might also choose to take on a part-time job after you retire. This extra income can help you cover basic expenses and keep you from dipping into your savings.

Finally, you might have to adjust the expectations you have for your retirement years. You might not be able to take a cruise each year. You might not be able to help pay for your grandchildren's college education. Remember, your first priority during your retirement is to make sure you have enough money to last until your death. Only by focusing on your finances will you be able to meet this goal.

© Fintactix, LLC 2015