When it comes to our old age you would be forgiven for thinking that modern life is offering many people somewhat of a double edged sword. The good news is that we have never lived longer, healthier lives. The bad news is that we have to pay for it.

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Your retirement is likely to span the best part of twenty years and for the vast majority of us this has to be funded by money accumulated during our working lives. A life in which everything appears to be getting more expensive.

Adults over 80 are America’s fastest growing population, and as the vast wave of baby boomers start to hang up their neck ties, the pressure on society to fund the old is only going to increase.

According to a Wells Fargo poll conducted in November 2011, one quarter of middle class Americans plan to work until they are eighty years old. Considering that the average lifespan for this country is 78, then it would seem that one in four actively plan to work until they die.

So how can we, in a world where life expectancy is ever rising, finance our retirements in an increasingly expensive world? Do we simply have to work longer? And if so, is it even possible to save more?

As you age your needs will change

You may have plans already formulating in your mind regarding your retirement. But whatever they are, it’s not only important to understand how you intend to fund it, but also that as you age, how your needs will change.

It is likely that at first you will enjoy a more active retirement where your main expenditure may be in the form of leisure activities. Over time however this is likely to change into a more sedentary lifestyle, where care and medical costs may prioritize.

Save, save, save

The most important thing to remember is that the sooner you start saving the better. Time is always one of the savers greatest assets and this is for two main reasons. The longer you save the more you can accumulate, and the more time you allow, the more your savings can mature through interest and investment based returns.

As with any future target, it’s important to set a savings goal and stick to it. A recent study found that to sustain a lifestyle deemed appropriate for their needs and expectations, the average US citizen needs to provide themselves with an annual income of about 70% of their pre-retirement salary.

Taking every option available

With this fresh in your mind, it is easy to understand the importance of researching the best savings technique for you. Whether you save into an IRA with the intention of purchasing an annuity, or contribute to a direct contribution plan, the important thing is that you get into the habit of saving as early as possible.

A defined contribution plan such as the 401(k), is one of the most common means of saving for retirement. Despite this, in 2010, The US Department of Labor estimated that 30% of private industry workers were not involved in a defined contribution plan.

If not already saving through one, it may be in your interests to ask your employer about your options, as there are clear advantages to schemes of this nature.

Not only can they offer a means of tax efficient saving, your employer may also contribute. These features can provide additional support that translates into a potentially larger income once retired. If you are not saving through a 401(k) or alternative scheme, then it may well be in your interests to consider the option.

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Other Options Available

Aside from the classic means of saving for retirement through a 401(k) or an IRA, many find that there are alternatives that also offer a form of income.

A manageable approach to part time work may be one option, and this does not necessarily mean continuing with the daily commute. One or two days a week may be enough to supplement your income, whilst the continuation of an active lifestyle may help with your general health and mobility. This is not something that needs to be done indefinitely, but it can provide an extra bit of disposable income whilst in early retirement.

Another idea is using your property. This is dependent on a number of factors, but for many, this can provide a welcome injection of cash at a time when you may need it most.

For example selling and downsizing into a smaller property may be an option, as would generating an income through letting your property out while you live elsewhere. Although the former does depend on a strong housing market, and may conflict with plans regarding inheritance for your family.

Despite this the surplus money may complement existing funds and be enough to cover expenses. Secondly, despite your best intentions, failure to prepare your retirement may place vast amounts of financial pressure on your family.

Whatever your decision, it’s vital that you consider your retirement options as soon as you can. It’s unlikely that the amount received through social security will be anywhere near enough to provide a good standards of living, and failure to prepare could have disastrous consequences for both you and your loved ones.

Saving is difficult at the best of times, but regardless of your financial situation, many find that small, regular contributions can go a long way to making your hard earned retirement as enjoyable as possible.

Rob Wells writes for momentum a financial based website providing tools, products and information to help everyone take control of their financial future.

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