Baby boomers are in trouble. They’re nearing retirement, but many have very little, if any, money saved. Now what? This is the bottom line on how to retire comfortably, even if you haven’t saved a dime.

Bottom Line/Personal:   Obviously it’s impossible for someone to re-create a lifetime of savings in just 10 or 20 years, but are there some emergency strategies that people who have undersaved can leverage?
Thomas J. Henske, CFP   Well, it’s a huge problem. There was a statistic that went out a couple of weeks ago that talked about a couple that’s 62 years of age. Do you realize they have a joint life expectancy of 30 years? I think that’s why, in the Tax Code, they’ve created the catch-up provision, which allowed people to put more than the norm into their 401(k) and retirement savings plans once they hit 50. Clearly they see that there’s a problem.
Bottom Line:   Does it take some kind of special training for people who are used to spending one way to suddenly relearn their whole budgetary process and spend differently?
Thomas Henske:   Sure, absolutely. Think about it like nutrition. Some of us have bad eating habits, and sometimes it’s going to take a long, long time to retrain those bad habits. Same thing happens with peoples’ finances. How much are they spending versus how much are they saving? I love when people really commit to what I call an “austerity budget” for six months, because what they find is that it’s not as hard as they think and when they retrain their habits, it has a lifelong effect on their overall finances.
Bottom Line:   What about changing their whole set of expectations or adjusting their idea of what their retirement is going to be—where they’ll retire, you know, what they’ll be doing in that retirement.
Thomas Henske:   Oh, absolutely they’re going to have to change their expectations. Think about it—they might have to change their expectations of how long they’re going to work for. It used to be age 65, maybe it’s now going to be 75. They may need to change their expectations about where they’re going to live—are they going to be living in a state with a high cost of living…or maybe think about where else they might live. And also maybe the things that they’re actually going to do in retirement—are they going to be able to be jet-setting around, or are they going to have to have a more sedentary retirement?

The bottom line for all of you nonsavers out there is be prepared to adjust your plans for retirement. You may need to adjust where you’re planning on living or the style of life in which you are planning to retire, and also be prepared to put yourself on a spending diet now, so you can afford to retire comfortably later.