How to bridge a retirement shortfall

abcnews.go.com:

If you want to get yourself thoroughly depressed, spend a little time looking at statistics about Americans’ retirement preparedness

If you want to get yourself thoroughly depressed, spend a little time looking at statistics about Americans’ retirement preparedness.

In  Vanguard’s most recent How America Saves report, the average participant balance in Vanguard plans was $134,000 in 2023, but the median balance was just $35,000. For workers with Vanguard plans who were between ages 55 and 64, the average and median balances were $245,000 and $88,000, respectively, in 2023. Roughly half of people between age 55 and 66 have no retirement savings at all, according to  U.S. Census Bureau data, and women are in worse shape than men from the standpoint of retirement preparedness.

Clearly, many people are hurtling toward a shortfall, or living through one. And for people who are dramatically undersaved and largely reliant on Social Security for in-retirement living expenses, there’s no getting around the fact that their standard of living in retirement is going to be lower than it was when they were working.

Rather than looking to a single blockbuster solution to help make up for a savings gap, what if you were to consider a little bit of several prudent strategies—being willing to cut your standard of living a bit in retirement, working a bit longer, and investing a bit better, for example?

Employing more modest changes around the margins of your plan means they’re apt to be more palatable from a lifestyle perspective, too; the thought of working until age 70 might not appeal but holding out until age 67 may be more doable.

As pre-retirees have no doubt heard, working even a few years past traditional retirement age can