Don't let financial experts scare you. It's in their interest to persuade you to save more money than you really need and hand over your nest egg for them to handle. Then they can skim off 1 or 2 percent as a profit every year.
Here are seven ideas to help you put together a strategy for retirement:
1. Assess where you stand. Count up your assets. As a benchmark, Fidelity Investments reports that with the past year's stock market increase, the average pre-retiree now has a balance of $250,000 in a retirement plan. If you have a pension, it's probably worth more than that. Then look at your debts. Is your mortgage paid off, or nearly so? Now is not the time to take on new debt. If you need to get a big loan to buy a new car, keep the old one and fix it up instead.
2. Downsize your housing. Some people hang on to their old suburban home in case the kids want to move back in. But this is a "what if," while the expense of carrying a home is a certainty. If your retirement budget is limited, then move to a smaller place in a less-expensive neighborhood, with lower taxes and less maintenance. Don't put off the move because the real estate market is shaky. You may sell your old home for less, but you will also pay less for a new place.
3. Don't subsidize your kids' lifestyles. The old saying tells us to give our children roots and wings: Roots to know where home is and wings to fly away. It may be hard to say no to your children. But it doesn't really help anyone to let them settle into their old bedroom after college. They need to find their own apartment, cook their own food and learn to live on their own. If you do decide a child can live at home, make them pay rent and share other costs. It's only fair to both you and your other children.
4. Share and share alike. An alternative to having your kids move in with you is to move in with your kids. Then you should pay rent, but it's less expensive than carrying your own place. If you're single, consider sharing a home with a friend or sibling. Two can certainly live cheaper than one. Maybe you can also share a computer, TV or car. Living with someone offers companionship as well.
5. Go international. At the other end of the spectrum, some people have pulled up stakes and moved to another country. There are retirement enclaves in Latin America, from Mexico to Costa Rica to Ecuador. Some Americans retire to the land of their grandparents, in Italy or Ireland, where they enjoy support from family members. Some people tout the attractions of Malaysia and Thailand. These countries are relatively safe, the cost of living is low and local people respect the elderly. Retiring overseas requires a lot of research, but it's an option more people are considering.
6. Search out free entertainment. If you want to live in London or cruise the Mediterranean, you'll need 100 percent of your pre-retirement income. But most people don't do that. Your own hometown offers low-cost entertainment options, from summer concerts to fall festivals to senior exercise classes in the winter. Check out the library for free seminars, book clubs, movies and lectures. Your church, veterans association or social club can provide many rewarding activities for your leisure time, all at little or no cost.
7. Take advantage of senior citizen discounts. Join AARP for discounts as well as supplemental medical insurance. Drive over to town hall and find out about real estate tax breaks, as well as other senior citizen discounts. While you're there, check out senior programs like free transportation, low-cost meals and health and medical services. Many municipalities offer programs that are underutilized simply because people don't know about them, or are too embarrassed to ask. But let's get real. The services are available, so take advantage of them.
Tom Sightings is a former publishing executive who was eased into early retirement in his mid-50s. He lives in the New York area and blogs at Sightings at 60, where he covers health, finance, retirement and other concerns of baby boomers who realize that somehow they have grown up.