If your savings aren't looking quite as strong as they should, you're not alone. More than half of U.S. workers have less than $50,000 stashed away for retirement, according to a survey from the Employee Benefit Research Institute, and of those workers, 26% have less than $1,000 saved.
Not saving enough can create a bleak outlook for the future, but there is some good news. New research shows that it's common to have to adjust your retirement plans, and doing so can help you bounce back if your savings are off to a rocky start.
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Why change can be a good thing in retirement planning
Roughly half of workers have had to change course when it comes to their retirement savings plans, according to a survey from TD Ameritrade, and of those who have adjusted their plans, 53% have done so at least three times.
Furthermore, the survey revealed that those with a lot of money in their retirement accounts tend to change course the most often, with a quarter of those with $250,000 or more stashed away saying they've changed their plans at least six times.
Why is this such a good thing? Because when you change your plans, you're giving yourself a better shot at reaching your goals. Retirement planning takes decades, and there's a good chance you'll experience certain life events during that time that impact your future. You may get a new job that allows you to boost your savings, for instance, or you could move to a new city with a higher or lower cost of living -- which impacts how much you'll spend in retirement.
If you stick to the same plan your entire life, you may not realize when that plan no longer fits your needs. That can be dangerous because you might end up reaching retirement age thinking you're right on track, only to realize the plan you've been following is no longer accurate.
The good news is that if you're behind on your savings, it is possible to catch up -- if you adjust your plans early enough.
How to tell if your plans are on track
To figure out whether you need to change course, you'll first need to set some goals. Primarily, you'll have to determine how much you should save by retirement age.
You'll need a few numbers in mind to calculate that goal, like the age you plan to retire, how much you expect to spend each year in retirement, and how much help you'll receive from Social Security benefits. Also, although it's a grim subject, consider your life expectancy. Retirees are living longer, and if your savings aren't enough to sustain a potentially long retirement, your golden years may not be as golden as you'd hoped.
With these figures in mind, use a retirement calculator to get an estimate of how much you should aim to save. You should also get an idea of how much you should be saving each month to reach that goal, which will help you determine whether your plan is on track or not. If you're currently saving less than what the calculator suggests, you're falling behind. But if your savings match the calculator's results, you're right on pace.
If you're drastically behind on your savings, you might be in for some sticker shock when you see how much you need to save each month. This is where adjusting your plan is crucial, because the earlier you realize you're off track, the smaller your adjustments need to be.
Those who are only slightly behind on their savings may only need to make a few budget tweaks to find some extra cash to put toward a retirement fund. But if you need to save thousands of dollars per month to reach your goal, budget cuts may not be enough. In that case, you may decide to pick up a side job and devote that income to your savings, or you could choose to work a few years longer than you'd initially planned. You may also choose to delay claiming Social Security benefits, which will result in bigger monthly checks and less money that needs to come from your savings in retirement.
Regardless of how you choose to adjust your strategy, the key is that you regularly check in on your retirement plan to make sure you're still on track. Think about your long-term goals, and if those have changed at all, you may need to adjust your savings. The sooner you make those adjustments, the better chance you have of achieving all of your financial goals.
