New Study Demonstrates Americans are Outliving Retirement Savings

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-- Money Resource Bills.com Outlines Eight Retirement Savings Strategies --

San Mateo, Calif. – July 27, 2010–

A recent study by the Employee Benefit Research Institute (EBRI) found thatnearly one-half of Baby Boomers and Generation Xers are at risk for not havingenough savings to cover basic retirement living expenses

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.Personal finance resource Bills.com recommends creating more realistic andaggressive savings strategies to close this anticipated retirement cash gap.

“Pension plans and Social Security are nolonger secure retirement options for most Americans - leaving many workers tofend for themselves in retirement,” said Ethan Ewing, president of Bills.com.“A healthy combination of budgeting, saving and leveraging of assets can turnmost lean retirement budgets into nest eggs that will make it possible forretirees to realize the golden years they deserve.”

EBRI’sRetirementReadiness Rating™ discovered that because many Americans are living longer,saving less, and planning poorly for health care costs, most will not haveenough money to pay basic living expenses throughout retirement. To help combatthis troubling trend, Bills.com shared eight strategies for making the most ofretirement.

1. Budget for Reality

It is easy to plan for retirement usingsuggested averages and advice from friends and family, but this can often fallshort of what is required for an adequate nest egg. If you envision a luxuriousretirement full of travel and free from money worries, then do your research.Understand the implications of inflation, taxes, and actual living costs. Donot underestimate how much money you’ll need after leaving the workforce.

2. Automate and PrioritizeSavings

A common excuse offered to justifyavoiding retirement contributions is “next year.” Enough “next years” will getyou nowhere. It is imperative that you begin saving early and often. The powerof compounding interest will make contributions in your twenties worth muchmore than the same investment in your forties. Automate savings so that youdon’t have a choice. It is also imperative that parents put money into theirretirement plan before funding a college savings program. You can always findloans for college, but not for retirement.

3. Eliminate Debt

One of the most important ways to enterretirement is debt free. Subtracting principal and interest payments from afixed income is an easy way to expand debt instead of eliminating it. By payingoff outstanding debt before you enter retirement, you can build a more accuratefixed budget and avoid the risk of falling behind or defaulting on payments.

4. Diversify Savings

There is no one magic investment vehiclefor retirement savings. With a realistic retirement goal in mind, seek helpfrom a variety of financial advisors to understand what options exist and whichare best for your individual needs. Annuities, life insurance, 401(k) plans,and IRAs all present viable and unique options. 

5. Play Catch Up

Older workers should take advantage oftax laws designed to help them save more money for retirement. Those workerswho turn 50 in the calendar year and have met their maximum retirementcontributions can make catch up contributions. For a traditional 401(k) plan,this can be an additional $5,500 in 2010 that is eligible for an employermatch. Additional information is available on theIRSwebsite.

6. Social Security Buy Back

If you are already retired or collectingSocial Security, a little known strategy for collecting additional benefits isto cancel your current benefit level and then re-apply for greater benefits ata higher age. This is possible because the amount of benefits is calculatedbased on age – so the older you begin, the higher the monthly payout. In orderto qualify, recipients must first pay back benefits they have received to date.For more information, visit theSocial SecurityAdministrationwebsite and download Social Security Form 521.

7. Leverage Your Assets

If you find yourself entering retirementwithout the cash reserves you’d hoped for but with some assets at yourdisposal, you can still enjoy a comfortable retirement. Individuals in searchof cash who have a life insurance policy they no longer need can sell it in alife settlement. This can often return up to 300 percent of the cash surrendervalue on a policy

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.A reverse mortgage allows those 62 and older to receive monthly or a lump sumpayment in return for the equity they’ve built up in their homes. For moreinformation on a reverse mortgage visit the Bills.comReverse Mortgage Center.

8. Consider a Second Career

While many people decide to work longerinto retirement to save additional cash or delay tapping their nest eggs, manyalso look to second careers that are both personally and financially rewarding.A second career can be a good idea because you can match the demands and hoursto supplement your retirement income, leaving you with both more free time andless financial stress. Examples of second careers can be working as aconsultant, for a non-profit, or in a creative field such as writing.

Individuals with specific questions aboutretirement or how to best grow their next egg can use the Bills.comAsk Billservice to receive free,personalized answers to their questions. 

About Bills.com

Bills.com is the leading resource for free and personalized moneyhelp. Founded by a group of financial experts committed to helping consumerssave time, money and stress, Bills.com is designed to give consumers confidencein making money decisions. The site offers useful information, powerful tools,and real money experts to give consumers the information they need in the waythey want it.

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