No one has a crystal ball saying how much to save, but mapping out a plan helps.
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You may envision living out your golden years on a warm beach in sunny South Florida without a worry in the world. But they may not be so golden due to one problem – we can’t afford them.
More than half of Americans (57 percent) say they’ll need to work through retirement to stay afloat, according to a study from the Transamerica Center for Retirement Studies. 
Most people don’t know how much money they’ll need in retirement. They can’t predict chronic health issues or the inability to not work longer, so they don’t have any idea of how long their money will last.
Even if they have an idea, by the time they realize it, they don’t have the ability to catch up their savings to reflect it. The best tip we can give is to have an explicit financial plan.
1. Make a retirement financial plan
Only one in three workers and retirees had a written budget or used a web-based retirement calculator, according to a study called the Voya Retire Ready Index.  Less than a quarter of each demographic had a formal, written financial plan.
No matter how young or old you are, your very first step should be to create a budget. See what your necessities are by including how much you make versus how much you spend, starting with the most important and working your way down to the ones you could ditch.
Budgeting doesn’t have to be hard! Start using a budgeting tool that automatically updates Google Sheets and Excel with your bank, credit cards and other transactions
Categorize your expenses by the housing model: mortgage would be its own category, and so would utility bills, and home maintenance. Be as stringent or as flexible as you want; some could budget all their food into one category, while others may split it up as grocery purchases, coffee shops, and other restaurants. But remember to always include a budget line for your retirement saving. Make it a priority just like your other expenses.
Check out your banking online, since most banks offer resources to monitor your spending. At the very least, you’ll be able to track your transactions to see where your money goes. This goes for your credit cards as well.
If you’re looking to have a better retirement, there are plenty of ways to monitor your spending. You can get on the right track to a financial plan that works for you.
2. Start saving for retirement now
People are living longer and are running out of savings in retirement because they started saving too late. Start saving now, and have some peace of mind in retirement.
Nearly half of workers and 21 percent of retirees have $49,000 or less in total savings and investments, according to the Voya study. Even worse, 10 percent of both groups weren’t sure how much they had saved for retirement.
There are plenty of excuses as to why you have nothing saved for retirement, but don’t let these prevent you from doing what’s best for your future.
If you’re still working, good news, you’ve still got time. But the clock is ticking. Here’s what you should do if you can:
- Contribute to your employer’s 401(k) plan, or start your own if you’re self-employed.
- Open an Individual Retirement Account – the sooner the better. Because it uses compound interest, it’s a smart choice for younger or even middle-aged workers.
And even if you don’t think you’re making enough to start planning right now, you still should try. Regardless of income, a good financial plan has proven results of saving more. Investment advice company Financial Engines says that on average, a person with a financial plan saves about 10 percent of their salaries toward retirement, while those without a plan save about 6 percent. 
It may not sound like much, but Financial Engines does the math to show the difference. Someone earning $100,000 who puts 6 percent of their salary toward retirement could earn as much as $890,000 after 25 years. But if they had saved 10 percent, they could have as much as $1.13 million after 25 years – that’s an extra $240,000.
3. Prioritize your retirement financial plan
Mom and dad are blowing up their retirement plans to make sure their kids get through college. So, obviously, we need to broadcast a public service announcement like the one you hear every time you board a plane: “Please secure your own oxygen mask before assisting others.”
1. T. Rowe Price surveyed 2,000 parents who have both a retirement account and kids younger than 16, and found half were willing to dip into their retirement savings rather than let them take on student loans.  A similar number are willing to take on a second job.
The T. Rowe Price study says 52 percent of parents are willing to take on $25,000 or more in debt to pay for their kids’ college, with 23 percent willing to take on more than $75,000. Why? It’s all psychology – 63 percent say they feel guilty, and 58 percent feel like failures who don’t provide enough for their families.
If guilt and failure motivate you, here’s something to consider: Having debt in retirement means you’re going to struggle when you’re at your lowest. Your health isn’t getting any better, and you’re living on a fixed income – which probably means you’ll have to rely on your kids.
2. T. Rowe Price recommends saving 15 percent of your salary for retirement, preferably in a Roth IRA or 401(k), before putting any money toward college savings. Then the company says to aim for at least half the cost of a four-year education, using a 529 account.
The numbers may be totally unrealistic for most people – what do you expect from an investment firm? – but it’s exactly the right attitude. You need your finances in order before you help somebody else, and you ought to be putting money where it does the most good. That usually means three things:
- A place where you won’t touch it
- Uncle Sam won’t touch it
- It can grow faster than inflation
For more advice on retirement planning, check out Debt.com’s in-depth report How to Save for Retirement.
Published by Debt.com, LLC