Act Now to Save Your Retirement

Let's talk disconnects.

Approximately 75% of Baby Boomers expect they will be happier after they retire, yet 40% aren't sure they'll have enough money to live comfortably when they get there -- and a quarter of Boomers doubt they'll be able to retire at all.

How's your retirement plan looking now? Have you saved enough?

According to a recent study of the Baby Boom generation conducted by Del Webb, the active adult division of Pulte Homes, there's a major disconnect between Americans' expected and realized retirements.

Reality check
Here's what you can do today to make sure your retirement is the one you've worked so hard to achieve.

First, save early, save often, and save as much as you can. A common piece of Foolish wisdom around here is that it's never too late to start. If your employer offers a 401(k), that's a great way to start. Or maybe you're more of the money-under-the-mattress type. Whatever the method, just get started today.

Once you've started saving -- or if you're well on your way already -- determine when you'd like to retire and what you'll need when you get there. Then, assess how much risk you can stomach along the way. More risk-tolerant investors who are approaching retirement might consider plopping their money in a mutual fund with some equity holdings. Robert Brokamp, who heads up The Motley Fool's Rule Your Retirement service, believes large-cap stocks may be the most undervalued class and offer the best downside protection in the event of an economic slump.

Recently, he profiled Oakmark Select (OAKLX) -- a mutual fund with large-cap holdings such as McDonald's (NYSE: MCD  ) , Washington Mutual (NYSE: WM  ) , and Xerox (NYSE: XRX  ) -- and provided guidance on where it belongs in a pre-retiree's portfolio. Remember, as your retirement approaches, you want to reduce your exposure to higher-risk investments (stocks) and allocate more of your holdings to safer investments such as bonds.

You want me to do what?
If you're not really the do-it-yourself type, perhaps a target retirement fund -- a mix of stocks and bonds -- is right for you. Here's how it works: You invest your retirement savings in the fund closest to your desired retirement date, and the fund manager provides a suitable asset allocation and gradually ratchets down the percentage of stocks as the retirement date nears.

At retirement, you can still follow a one-fund strategy by switching to a balanced fund. Examples include Fidelity Balanced (FBALX) -- with treasury notes held alongside large caps such as AT&T (NYSE: T  ) and Bank of America (NYSE: BAC  ) -- and Vanguard Balanced (VBINX), which is anchored by blue chips such as Johnson & Johnson (NYSE: JNJ  ) .

Connecting the dots
Perhaps you scoff at all this. After all, your retirement plan is rock-solid and you know your golden years will be everything you imagined, right?

But if you need help erasing the disconnects between planning for retirement and being able to enjoy it when you get there, let Robert and his Rule Your Retirement team help. A 30-day free trial grants you access to all of the retirement resources, including the DirectAdvice Planning Tool, which will definitively answer whether you're saving enough to have the retirement of your dreams.

So take a peek today. Your happiness may just depend on it.

Foolish editor Jill Ralph owns shares of Johnson & Johnson. Washington Mutual, Bank of America, and Johnson & Johnson are Motley Fool Income Investor recommendations. The Fool has a disclosure policy.

Read/Post Comments (0) | Recommend This Article (38)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 528365, ~/Articles/ArticleHandler.aspx, 10/26/2016 1:29:57 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated Moments ago Sponsored by:
DOW 18,199.30 30.03 0.17%
S&P 500 2,139.60 -3.56 -0.17%
NASD 5,258.24 -25.16 -0.48%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

10/26/2016 1:14 PM
BAC $16.86 Up +0.14 +0.81%
Bank of America CAPS Rating: ****
JNJ $114.57 Up +0.61 +0.54%
Johnson and Johnso… CAPS Rating: ****
MCD $112.29 Down -0.44 -0.39%
McDonald's CAPS Rating: ***
T $36.48 Down -0.23 -0.61%
AT and T CAPS Rating: ****
WAMUQ.DL $0.00 Down +0.00 +0.00%
Washington Mutual,… CAPS Rating: No stars
XRX $9.65 Up +0.04 +0.42%
Xerox CAPS Rating: ****