What to Do When You Want to Retire but Don't Have Enough Money

A recent study by the Insured Retirement Institute found that fewer than one in four baby boomers believe they'll have enough money to support them through retirement. That’s not surprising when you consider the gap between how much people have saved and what they think they’ll need. For example, 80% of the workers polled for the Employee Benefit Research Institute's 2017 Retirement Confidence Survey who had attempted to calculate how large a nest egg they’ll need estimated they'd require $250,000 or more in savings to live comfortably. Yet Vanguard’s latest How America Saves report puts the median 401(k) balance for 55-to-64-year-olds at less than $72,000.

So what can you do if you're getting towards the end of your career and your nest egg is well shy of what it should be to maintain your standard of living? Here are four ways to improve your retirement prospects:

1. Make an all-out push to save. Yes, this is an obvious move, and one that may require painful cuts to your lifestyle. But there's no way around it. The good news, though, is that if you're serious about stashing away some bucks in the home stretch to retirement, you can accumulate a tidy little sum. For example, someone who has nada saved at age 50 but who begins putting away $500 a month would have roughly $144,000 by age 65, assuming a 6% annual return. Bump that monthly savings figure to $1,000, and we're talking about a savings balance of about $288,000.

Will a late savings sprint be enough to put you where you would have been had you been saving 10% to 15% throughout your entire career? Probably not. But you'll certainly have a much better shot at a comfortable post-career life than had you entered retirement with little or no savings and only Social Security to fall back on.

2. Get your retirement portfolio into shape. If your savings balance is smaller than it should be, you may be tempted to load up on stocks, in hopes that a pedal-to-the-metal investing strategy will boost the eventual size of your nest egg. Problem is, an overly aggressive approach could also backfire, especially if stocks are rocked by 50%-or-larger bear-market losses just as you're on the verge of retiring. A better way to go: Put together a mix of stock and bond funds that's likely to give you the most return for the level of risk you're willing to take. You can do that by completing Vanguard's 11-question risk tolerance-asset allocation questionnaire, which you can find in the Investing section of RealDealRetirement's Retirement Toolbox.

Once you've decided how to divvy up your savings between stocks and bonds, limit yourself as much as possible to funds that tend to have the best potential to generate competitive long-term gains—namely, low-cost index funds that track the broad stock and bond markets. You can find such funds—some of which charge expenses of less than 0.1% a year, or less than a tenth of what many actively managed funds charge—in the "Building Block Funds" section of Money's list of the 50 Best Mutual Funds and ETFs. By the way, holding the reins on investment costs will not only help you build a larger nest egg during your career, it will also reduce your chances of prematurely depleting your savings after you've retired.

3. Stay on the job a few more years. Extending your career can improve your retirement prospects in several ways. The fact that you're able to save more and that the savings you accumulate have more time to grow can significantly boost the size of the nest egg at retirement. If the hypothetical 50-year-old in the savings scenario above were to save $1,000 a month and work to age 68 instead of 65, he would enter retirement with an extra $95,000, or a nest egg of nearly $383,000 instead of roughly $288,000. Plus, that larger nest egg would now have to fund two fewer years of retirement.

Staying on the job can also boost your Social Security benefit. For each year you delay claiming Social Security between age 62 and 70 your benefit increases by roughly 7% to 8% a year, perhaps more if those final extra years of work increase the lifetime earnings that Social Security uses to calculate the size of your monthly check. Social Security's Retirement Estimator tool can help you compare the benefit you might receive at various retirement ages.

Just because you want to work longer doesn't necessarily mean you'll be able to, however. EBRI's Retirement Confidence Survey shows that nearly half of retirees had to leave the workforce earlier than they'd planned, usually due to health issues, a company downsizing or having to care for a spouse or other family member. Nonetheless, if full-time work is a no-go, you may still be able to find a part-time gig by visiting sites like RetiredBrains that post jobs for older workers. The point, though, is that the longer you can avoid dipping into your nest egg and the less you have to withdraw, the more time your money will have to grow and the more likely your savings stash will be able to support you throughout retirement.

4. Consider more "radical" moves. It would be great if we could all make the transition to retirement without having to make compromises. But that's not always possible, so you may have to look for ways to stretch your nest egg or find ways to supplement it. For example, if you have substantial equity in your home, you may be able to tap into it for retirement income by downsizing to a less expensive home or by taking out a reverse mortgage.

And if you're willing to pick up and move, you may be able to reduce the amount you pull from your nest egg each year (thus allowing it to last longer) by relocating to an area with lower living costs. To get an idea of how much you may be able to save on living expenses, you can go to NerdWallet's Cost of Living Calculator, which has information on housing, food, health and entertainment costs for 231 cities.

Even if you take measures like the ones I've outlined above, there's no assurance that you'll be able to retire in the same style you could have managed had you been saving diligently all along. But your retirement prospects will definitely be a lot better than if you do nothing at all.

CORRECTION: Eighty percent of workers polled for the Employee Benefit Research Institute's 2017 Retirement Confidence Survey who attempted to calculate how large a nest egg they’ll need estimated they'd require $250,000 or more in savings to live comfortably. An earlier version of this article incorrectly said that average figure was based on all the survey respondents.

Walter Updegrave is the editor of RealDealRetirement.com. If you have a question on retirement or investing that you would like Walter to answer online, send it to him at walter@realdealretirement.com. You can tweet Walter at @RealDealRetire.