Will you have enough money for your retirement? This is a major concern facing many Americans, as retirement looms closer on their financial horizon. If you’re facing a retirement shortfall, you’re not alone. Many American households will retire on less annual income than they may need to live comfortably during their "golden years."

An often-used rule of thumb suggests that you may need at least 60% to 80% of your pre-retirement income to maintain your current lifestyle. The following steps can help you get a clearer view of your retirement finances and identify any needed adjustments to your savings strategy:

1. Project a retirement budget, but don’t compromise your standard of living. Ask yourself key questions, such as how you would meet future medical expenses, housing costs, and of course, travel and entertainment expenses. This will give you a target for your budget.
2. Review your assets to see if you are satisfied with their performance. Identify your lowest performing assets by listing them in order of their average rates of return. Consider reallocating your assets to weed out the poor performers. Conservative investments such as certificates of deposit (CDs) and savings accounts* are relatively safe, but their growth may not keep pace with inflation. Bear in mind, however, that seeking increased returns may entail assuming greater risk. In short, you will have to choose your investments according to your risk tolerance and the time you have left until retirement.
3. Consider moving to a more affordable locale that could potentially free up additional retirement capital by lowering your cost of living.
4. Remember to include all your resources on your balance sheet. Some of these untapped sources may be the following:
   Home Equity. If you sell your home, the Internal Revenue Service (IRS) allows you to keep up to $250,000 capital gains tax free ($500,000 if you file a joint tax return), which you can then use to boost your retirement savings, provided you have owned and occupied the residence as a principal resident for an aggregate of at least two of the last five years before the sale.
   Highly-Appreciated Non-Income-Producing Assets. With careful planning, you may be able to convert non-income-producing assets, such as stocks or real estate, into income-producing assets.
   Valuable Collectibles. Specialty items, such as antiques, dolls, stamps, or a coin collection, may be converted into cash, but only if you’re willing to relinquish them at some point. Evaluate what their worth will be to you in your retirement years.
5. Consider delaying your retirement. Each additional year you wait will help reduce your budget shortfall; in addition, it will give you an added chance to increase your savings.

The only way to deal with a potential retirement shortfall is to plan carefully and begin acting now. Once you’ve firmed up your strategy, go ahead and put it into effect. If you start now (and it’s never too late), your golden years could be just as you have planned. $
*Note: Bank CDs and savings accounts are FDIC insured up to applicable limits and offer a fixed rate of return. In addition, Marlborough Savings Bank provides further insurance through DIF so your bank deposits are fully insured.

Copyright 2008 Liberty Publish- ing, Inc., Beverly, MA. The opinions and recommendations expressed herein are solely those of Liberty Publishing, Inc., and in no way represent advice, opinions, or recommendations of the Financial Planning Association, its affiliates or members. CFP™ and CERTIFIED FINANCIAL PLANNER™ are federally registered service marks of the Certified Financial Planner Board of Standards (CFP Board). This summary does not constitute legal and/or tax advice and should only be relied upon when coordinated with a qualified legal and/or tax advisor. October, 2008.