retirement ready

A recent study published by the National Institute on Retirement Security shared some startling information about how retirement ready American workers are:

  • 1/3 of all people between the ages of 55 and 64 haven’t saved anything for retirement.

  • 38 million working-age households in the United States have yet to start saving for retirement.

  • The average retirement savings for people 10 years away from retirement is $12,000.

Most of these workers may have limited ability to save or prepare for retirement. They also may not be in a position to hire a financial adviser to guide them. During my work with retirement plan participants for more than 30 years, I have met with many people who are close to retirement but have no retirement savings. What do I tell them?

How To Become Retirement Ready

Continuing to work needs to be a part of your retirement plan

Most individuals close to retirement with no retirement savings are not particularly surprised to hear this. Many have resigned themselves to working as long as they can. Very few, however, understand that they probably will not be able to continue to work for their current employer for as long as they wish.

Debt is not your friend

Throughout their working lives most of these individuals have not been afraid to take on debt. Financing purchases and spreading payments over many years were the only way they could afford to buy homes, cars, furniture, electronics, etc. However, that perspective needs to change since earnings during retirement may not be sufficient to fund loan payments. Becoming retirement ready may involve paying off debt by using other resources.

You may have to sell your house

Those that were able to purchase a home and accumulate equity in it may face the uncomfortable fact that one of their only resources to fund living expenses in retirement may be the equity in their home. Downsizing to an apartment to free-up home equity may be the primary retirement strategy.

Save more and spend less by making a budget

Most of the individuals I talk with have never created a household budget. When I ask them what they spend their money on, many say “it just goes”. If I ask them to be more specific, generally it is hard for them to share how they spend their money. Like most Americans, they live check-to-check. Many people are not financially confident or competent and the addition of a little structure, via a budget, can make a big difference in their lives helping them to become retirement ready.

Make good decisions about Social Security

As the National Institute on Retirement Security study outlines, there are 81 different options for married couples thinking of applying for Social Security benefits. Collecting as soon as possible may not always be the best strategy.

The situation is not hopeless for these individuals, however, time is not on their side. The sooner they begin a planning process, the better chance they have of becoming retirement ready.


About the Author

Robert C. Lawton, AIF, CRPS is the founder and President of Lawton Retirement Plan Consultants, LLC. Mr. Lawton has over 30 years of retirement plan consulting and administration experience and has provided consulting services to many Fortune 500 companies including: Aon Hewitt, Apple Inc., AT&T, First Interstate Bank, Florida Power & Light, General Dynamics, Houghton Mifflin Harcourt, IBM, John Deere, Mazda Motor Car Company, Northwestern Mutual, Northern Trust Company, Trek Bikes, Tribune Company, Underwriters Labs and many others. Mr. Lawton may be contacted at (414) 828-4015 or

About Lawton Retirement Plan Consultants, LLC

Lawton Retirement Plan Consultants, LLC is a Milwaukee, Wisconsin-based independent, objective Registered Investment Advisory (RIA) firm providing investment advisory, fiduciary compliance, employee education, vendor management and plan design services to 401(k) plan sponsors. The firm currently has contracts in place to provide consulting services on more than $400 million in plan assets. For more information, please contact Robert C. Lawton at (414) 828-4015 or or visit the firm’s website at: Lawton Retirement Plan Consultants, LLC is a Wisconsin Registered Investment Adviser.

Important Disclosures

This information was developed as a general guide to educate plan sponsors and is not intended as authoritative guidance, tax, legal or investment advice. Each plan has unique requirements and you should consult your attorney or tax adviser for guidance on your specific situation. In no way does Lawton Retirement Plan Consultants, LLC assure that, by using the information provided, plan sponsor will be in compliance with ERISA regulations. Investors should carefully consider investment objectives, risks, charges and expenses. The statements in this publication are the opinions and beliefs of the commentator expressed when the commentary was made and are not intended to represent that person’s opinions and beliefs at any other time. The commentary does not necessarily reflect the opinion of Lawton Retirement Plan Consultants, LLC and should not be construed as recommendations or investment advice. Lawton Retirement Plan Consultants, LLC offers no tax, legal or accounting advice and any advice contained herein is not specific to any individual, entity or retirement plan, but rather general in nature and, therefore, should not be relied upon for specific investment situations. Lawton Retirement Plan Consultants, LLC is a Wisconsin Registered Investment Adviser and accepts clients outside of Wisconsin based upon applicable state registration regulations and the “de minimus” exception.