To help you get a start, and a taste of what an adviser might say, we presented a hypothetical 55-year-old couple to three area professionals - to ask how the couple might adjust in the final years of working, and how they might navigate once they took the plunge.
We chose details that land our couple close to U.S. medians on various measures, with a few hopeful twists such as steady employment and saving. With that in mind, let's call them Mr. and Ms. Hope.
The Hopes earn $70,000 a year - $50,000 by the primary breadwinner. But they have been lucky and frugal enough to amass a net worth of $300,000 - 10 percent above the 2007 median for the 55-to-64 age cohort, according to the Federal Reserve's triennial survey of consumer finances. Those numbers tanked in the 2010 survey but are likely to have partly recovered when 2013's is done.
The Hopes own a home worth $240,000, with $110,000 left on a mortgage they hope to pay off before they turn 67 - around what Social Security considers their "full retirement age." To round out our portrait, we painted them with $25,000 in non-mortgage debt, $95,000 in other liquid assets, and $100,000 in the main earner's 401(k) account, to which they have been adding 6 percent, or $3,000, a year.
For a median-income couple, they're doing fairly well in an economy where most recent gains have gone to those at the top. But will they have enough to replace at least 70 percent to 80 percent of their preretirement income, as many financial experts recommend?
If they retire as planned and in good health, they'll be nearly 67 with a life expectancy that could easily take one or both into their 90s. In today's dollars, they'd be due about $30,000 in annual benefits. To hit 70 percent of preretirement income, they'd need to draw at least $19,000 a year from savings and investments.
We consulted these pros: Julie McNulty Wielehowski, a fee-only financial planner at Cherry Hill's Compass Financial Advisors; Charles "Chas" P. Boinske, president of Wayne's Independence Advisors; and Jane Simpson, an in-house adviser at Malvern's Vanguard Group, a local institution with a national reputation as a pioneer in low-cost investing.
The good news: No one found the Hopes' retirement hopes to be, well, hopeless. But all three recommend some short-term shifts and some hard, long-term thinking. Here are highlights of their advice:
Live within your means - and ratchet back if you can. All three advisers recommend paying off high-interest debt as soon as possible, setting aside a few months of expenses in an accessible emergency fund, and, above all, boosting retirement savings. If either employer offers any unused 401(k) match, for instance, not participating is "leaving money on the table," Simpson says.
Boinske, whose firm specializes in asset management for wealthier clients, notes that IRS rules allow taxpayers over 50 to make "catch-up contributions" to 401(k) accounts on top of the current $17,500 annual maximum. So whatever extra the Hopes can manage to put aside, they can do so now and reap a tax benefit, too.
Wielehowski suggests putting 10 percent a year into the accounts, or $7,000, and boosting that by 1 percent a year.
Consider working longer. This isn't an option for everybody, but Wielehowski and Boinske both say the Hopes should consider working till they turn 70, for two reasons. One is that each extra work year adds 8 percent to their Social Security benefits. The other is that any extra income, even from part-time work, will extend the horizon for a nest egg they could easily outlive.
Weigh retirement wishes. This is a qualitative consideration more than a quantitative one, but the pros say it should be part of the conversation to guide other choices.
"Do you intend to travel or downsize?" Wielehowski would ask the Hopes. "Do you have hobbies, interests, or volunteer work that can keep you engaged?"
If they have children, asks Simpson, "what are their feelings around supporting them through years of higher education?"
Accept some level of risk. As today's retirees already know, the post-2008 economy offers scant returns for ultraconservative investments. To reach their goals, the Hopes need to tolerate some market risk and avoid panicking in a downturn.
All three of our experts suggest something close to a 50-50 mix of bond and stock investments, though Boinske's firm would replace some of the stocks with 10 percent of real estate and commodities. Simpson says that from 1926 to 2012, a 50-50 mix has produced an average 8.25 percent annual return - enough to get the Hopes to 75 percent of preretirement income even without a boost in their savings rate.
Would they have to dip into principal? In some years, yes. Drawing down just 4 percent of their nest egg annually, a common rule of thumb for retirees, is likely to leave them well short of their target.
One key is keeping investment expenses as low as possible. Boinske often recommends exchange-traded funds (ETFs) or mutual funds that enable investors to "buy the whole market," such as Vanguard's Total Stock Market Index Fund, which reports annual costs of 17 basis points - 0.17 percent.
Wielehowski says fear has paralyzed people like the Hopes from taking crucial steps, including getting advice from an expert who can recommend an appropriate mix of low-cost investments.
"The gloom-and-doom talk is what scares people from doing something," she says. "The longer you wait, the harder it gets."
Contact Jeff Gelles at 215-854-2776, email@example.com, or @jeffgelles on Twitter. Read his blog at www.inquirer.com/inquiringconsumer.
Vanguard offers an excellent online calculator at http://bit.ly/eCkT4. The National Association of Personal Financial Advisors ( www.napfa.org) is one resource for locating fee-only planners.