In the last 6 months I have taken an active interest in my retirement portfolio and savings. Although I am still in my 20’s, I am finally in a stable position with employment and I have been in my career field for 5 years now. I have spoken with several people and asked questions regarding retirement plans, savings plans, and other important investment information for my future. Additionally, I have started to research online and looked at several books. One intriguing short article I read in the Money Section of Black Enterprise Magazine recently peaked my interest and gave me some important information. Below is a summation of the article:

Don’t Run out of money in retirement: 5 tips to make sure you don’t fall short and outlive your savings…

Many baby boomers are beginning to enter their retirement years, and are falling short of their financial needs. In an article in the “Money” section of Black Enterprise Magazine, Carolyn Brown discusses 5 tips that can help baby boomers or those of younger generations to make smart decisions regarding their retirement, that will pay off in the end.

According to the Employee Benefit Research Institute, “early baby boomers, (people 58-64) have a 44% chance of not having enough money to pay basic retirement costs and uninsured medical expenses. “Late boomers (ages 48-57), and Generation X workers (38-47), have about a 45% chance of running short, the study concluded.”

The following 5 tips come from Clyde Anderson, who is a financial lifestyle coach:

1. Determine your needs. The rule of thumb is that you’ll need about 70% to 80% of your pre-retirement income to live on during retirement, according to your lifestyle. To get a snapshot of what this looks like, analyze your spending. Look at your bank account statements monthly, or try using programs such as mint.com looking closely at various categories of spending including: entertainment, food, travel, etc.
2. Do the math. Examine the three areas critical for determining how much money you will need to retire: A. Your current age (when do you plan to retire) . B. Your goals, C. Your projected life expectancy. (Most benefit specialists and companies use 90 as a standard age- how long will you live in retirement (20-30 years).
3. Don’t set it and forget it. If you begin to make a plan, make it realistic enough to follow and continue to track your progress.
4. Rebalance. You can take one of the two general approaches which is to rebalance on  a regular time schedule such as quarterly, semi-annually, or annually, or rebalance when the  allocation is a certain percentage points away from its target due to the difference between funds in your 401k over time.
5. Read your statements. “Not looking at your statement is like throwing away money.” – says Anderson. Take the time to learn and understand what your statements are telling you especially in terms of the expense ratio and fees for each mutual fund in your account. “Did you know that just 1% in fees and expenses reduces your account balance at retirement by 28%, eating away your returns?”