Nearly one-half of the oldest Baby Boomers are at risk of not having enough retirement resources to pay for basic expenses and uninsured health care costs, while 44 percent of Generation Xers have the same predicament, according to the Employee Benefit Research Institute.

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However, it’s possible to get ahead of the retirement cash crunch by beginning to save earlier and delaying retirement for a few years, according to Prudential Financial, Inc. Their research suggests that a secure retirement is possible by properly managing a 401(k), such as committing to automatic escalation of contributions, saving at a rate that maximizes the employer match and combining those funds with Social Security payments.

Generational Retirement Concerns

Baby Boomers, those born from 1946 to 1964, are at the forefront of the trend that is experiencing a change in the way Americans are retiring. According to the Social Security Administration, roughly 10,000 boomers are reaching retirement age each day and that trend will continue for the next 15 years.

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When you consider disappearing pensions, increasing longevity, a propensity to spend instead of save and the recent impact of the great recession on wealth and security, the 76.5 million boomers who make up 25 percent of the population have a lot retirement decisions to make.

But boomers aren’t alone in their need to deal with impending retirement choices. Gen X, those born from 1965 to 1980, with the oldest members turning 5o this year, is the first generation to move into retirement with completely new rules. Most of this generation has spent their entire working years during the rise of 401(k) plans and a shift away from traditional pension plans. The Gen X population is expected to peak at 65.8 million in 2018, according to the Pew Research Center.

Both boomers and Gen Xers are concerned that they aren’t saving enough and are not prepared for retirement, according to a recent survey by AARP of registered voters in New York. A majority of both groups do not expect to have a comfortable retirement, with some members not expecting to retire at all.

Additionally, Gen Xers have lower expectations of Social Security benefits than do boomers, and they feel that education and student loan debt will hamper their ability to save for retirement. The report showed that 30 percent of Gen Xers in New York and 38 percent of Boomers are not contributing to any retirement savings account. However, there was widespread voter support to improve access to workplace retirement plans with a state-supported savings alternative.

Retirement Savings Options

The burden of responsibility for retirement savings continues to shift from companies to individuals and even those who participate in 401(k) plans are falling short of building retirement reserves that will provide lifetime income. There are about 74 million employees with workplace retirement plans, but only about 41 percent participate in them, according to 401(k) adviser Financial Engines.

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But how much should you save? New research by the Center for Retirement Research at Boston College (CRR) finds that, on average, 35 percent of retirement income must come from 401(k) plans in order for households to maintain their pre-retirement standard of living. This translates to 25 percent for low-income households, 32 percent for middle-income households, and 47 percent for high-income households.

Making full use of the 401(k) options can help individuals reach their standard of living goals. For example, the average employer match rate is 2.7 percent. If a middle-income worker begins saving at age 25, and receives the 2.7 percent employer match, then retires at age 67, that individual would need to save 4.3 percent annually, for a total savings rate of 7 percent, according to Prudential. The same worker who begins saving at age 35 would need to save 9.3 percent annually, for a total savings rate of 12 percent.

Finally, in assessing how individuals are preparing for life in retirement, the traditional “three-legged stool” of retirement security — Social Security, employment-based plans, and personal financial assets—have been the norm. But Prudential added a fourth pillar, Retirement Choices, which captures lifestyle and financial choices.

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For most individuals, no one pillar is sufficient to meet retirement income needs. For a confident retirement, individuals should consider all four pillars:

Social Security: A social insurance program that provides retirement benefits as well as survivor and disability benefits.

Employment-Based Plans: Public, private, and not-for-profit employer plans, including defined contribution plans, such as 401(k) and profit-sharing plans, defined benefit pension plans, and non-qualified and stock option plans.

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Personal Financial Assets: IRAs, annuities, bank deposits, mutual funds, individual securities, and life insurance.

Retirement Choices: Lifestyle and financial choices that include when to start retirement, whether to work in retirement, where to live, and how to allocate assets in retirement, including converting assets to income, and protecting assets and income.

The important thing is to begin early, find the approach that works best for you, and save consistently.