Don't Retire Poor

After working hard all your life, you don't want to struggle to make ends meet in retirement. Yet that's exactly what many baby boomers will have to do.

The New York Times recently published survey results showing how much members of the baby boom generation have in savings and investments. Unfortunately, most of them have a long way to go before they'll have enough to retire comfortably.

Haves and have-nots
Oddly enough, the survey results tell two very different stories for different groups of people: Those covered by a pension plan at work and those who are not. You might expect that those who will get a monthly check at retirement might skimp on their savings and investments, it turns out that the reverse is true. The median baby-boomer covered by a pension plan has a bit more than $100,000 in investment assets, compared to just over $50,000 for all baby boomers.

Meanwhile, those who don't have a pension plan, who arguably should have the most set aside, had far less in savings. Over half of those without a pension plan had less than $25,000 set aside. Yet more and more people are falling into this category.

Young companies like Google (Nasdaq: GOOG) and Cisco (Nasdaq: CSCO) never offered traditional pensions. Many companies that have pension plans, such as Hewlett-Packard (NYSE: HPQ), Circuit City (NYSE: CC), FedEx (NYSE: FDX), and Sears Holding (Nasdaq: SHLD), are freezing out new employees from participating in them.

Banking on a home
For many Americans, the primary focus of building net worth during their early careers was in building home equity. Homeowners can expect to build a respectable nest egg simply by making regular mortgage payments.

Yet relying on your home to finance your retirement isn't a perfect answer. After all, you'll still need to live somewhere, and while you might be able to downsize to a smaller home, that might not free up as much money as you'd hope. Moreover, given how easy it was to tap home equity during the housing boom, many have already used both paid-down principal and price appreciation to finance other spending.

Perhaps most importantly, just as trying to time the stock market can give you a nasty surprise, relying on the housing market to bail you out in time to retire won't work out the way you hope. If you're forced to sell in a down market, you may not have many options to make up for a cash shortfall.

Enough isn't enough
It's clear from the survey results that many baby boomers underestimate the challenges of retiring with enough money to support themselves. Less than 5% have saved $1 million or more. Yet with life expectancies growing longer and typical retiree expenses ever on the rise, becoming a millionaire might be just the first step toward guaranteeing a comfortable, prosperous retirement.

Of course, some who are in the baby boom generation have plenty of time to fix the problem. The oldest boomers turned 61 this year, and those in the tail end are just 43 years old, leaving them more than 20 years to turn their fortunes around.

You can do it
As dire as these figures seem, it's not too late to take action and improve your retirement prospects. Being aware of the problem is a vital first step. And it's not as hard to build an impressive investment portfolio as you might think -- even if you are in a hurry.

Consider: If you set aside just $100 each month and earn 10%, your savings will grow to over $76,000 in 20 years. That by itself would put you ahead of more than half of your peers. And even though you might be annoyed with advice on how to save more, it really is possible to make your money go further.

Read these articles to learn more:

• How you can win the race to retirement
• What you need to do to retire sooner
• Why you need to take charge of your 401(k) plan.