What is your definition of the “Golden Years”? Some argue that the true golden years are between ages 40 and 60, when you are still physically and mentally fit and have financial stability. Without proper planning, many who enter retirement may discover the reality is not quite what they had imagined. That picture-perfect scene with the happy retiree reclining in a sunny spot while sipping a cool drink is not automatically waiting at the end of a career. People are living longer these days, which means retirement can extend for 20 or more years. According to a recent MSNBC report, half of those age 65 and over have incomes lower than $18,819 and in 2011, 41.3 million Americans were age 65 and older.

Although a longer life is something we all want, that promise may include the real possibility that we may outlive our savings. Many individuals are finding themselves working well into their seventies due to improper retirement planning. So, what can you do?

First of all, start early. If you’ve gotten a late start, you may have to play catch-up. The later you wait to start, the greater chunk of your income you should set aside. More companies are now automatically enrolling employees into 401(k) plans. However, many workers are likely to change jobs, allowing them to cash out their 401(k). It may not seem like a lot of money. Maybe its $20,000 or $30,000 and you think, “I’ll pay off my car or my credit card bills.” Resist the temptation and roll the money into a new plan.

Don’t take Social Security to early. Another potential mistake many people make is collecting Social Security too early. 75% of retirees grab those benefits at age 62, as soon as they can, not realizing you are taking a 25% cut in your benefits for the rest of your life. Baby boomers are retiring at the rate of 10,000 a day, making social security planning more important than ever.

Stay informed, educate yourself. As you get closer to retirement, learn all you can and ask questions. Just because you don’t know about it does not mean it doesn’t exist. You will be amazed at how many new retirement products and strategies that is currently available. Many of them are designed to reduce tax liability, increase diversification, and protect your principal.

Don’t put all of your retirement eggs in one basket. If you’re currently contributing to a 401(k), pat yourself on the back. However, you should be wary of putting all of your financial eggs in one basket—typically, holding a single investment vehicle can increase your risk, and in the case of just having a 401(k), it lowers your options when it comes to taxes.

And finally, one size doesn’t fit all. What is appropriate for your co-worker or friend may not be the best strategy for you. Sit down with an independent financial advisor and come up with a retirement plan that is tailored just for you. Regardless of where you are, you can always create a financial plan. You may not become a millionaire overnight, but it’s about taking one step at a time.

Lynda V. Harris, Financial Advisor

The Henderson Financial Group, Inc., 305-825-1444

Lynda is a Licensed Securities Broker and co-host of the financial radio show “Understanding Money” heard Saturday mornings at 8:00 AM on WZAB 880 AM.

“Securities offered through IFS Securities, Broker/Dealer, Member FINRA/SIPC. IFS Securities and The Henderson Financial Group, Inc. are separate entities.”