The race to the finish line—the time between an empty nest and retirement—is tightening. A major generational shift has taken place, and it's having a huge impact on when and how we save and plan.

Most older baby boomers like myself had children in their 20s and empty nests by age 50. They used that time to accumulate enough money to retire. When my children were in high school, their friends' parents were in their late 30s or early 40s. It was unusual to run across 50-somethings at a PTA meeting or high school basketball game.

I don't need a bunch of expensive research to confirm what I see with my own eyes: Couples are marrying later in life, having children later, and even spacing them out more. My own unscientific survey confirmed this. My oldest son just turned 50, and his two children are 14 and 12. My stepdaughter is 36, and she has a nine-year-old and four-year-old. They're right in line with their peer group.

So, assuming our grandchildren go to college, my children could easily be in their early 60s before their kids are off their payroll. Even if they push retirement back to 68, the time allotted for their race to the finish line has been cut by about 50%. If they had followed in their parents' footsteps and waited until the nest was empty to get serious about retirement, they'd damn sure have to be world-class sprinters.

On top of that, two-income households have become a virtual necessity just to make ends meet. Among folks my age, many mothers reentered the work force as their children went off to high school. The second income was a luxury, and the extra money could be used to jump-start capital accumulation for retirement. Today, a second income seems to be necessary just to meet current expenses.

Then there's that pesky issue of debt. For many of us, there's some lag time between both spouses committing to a debt-free life and wealth accumulation. It can easily take 3-5 years to pay off debt, and only then can one actually start socking away money. I remember wishing I had money to invest when I was younger. However, while I could have had $10,000 in my brokerage account, I would have also had a $10,000 credit-card balance with 18% annual interest. Simple math told me I was better off getting out of debt and staying that way.

So, let's imagine a couple whose nest is finally empty at age 62. At that point, they get serious about paying off debt and accumulating wealth. If it takes three years to become debt-free, that leaves just three years to stockpile money for retirement, if they retire at 68. This couple could save 100% of their salary for those three years, and they still would not have nearly enough to retire.

The Long Jog to the Finish Line

You might be thinking something like, "Well, Dennis, I'm 50. There's not much I can do about marrying and having had kids at 35 now." And you'd be right. Frankly, there are many advantages to marrying and having children at a later age, and I certainly don't want to harp on folks who made that decision. It does, however, mean you have to plan differently than the generation immediately before you.

So what can younger baby boomers do?

Get on with the job. I know I've said it before, and I'll say it again: the time to start planning for retirement is today. Younger boomers have to run a different race than I did, but they still need to start, regardless of other drains on their resources.

Reprioritize wealth accumulation. It's easy to give yourself a nice reward every time you get a raise, but it's much tougher to save a portion of that raise or use it to pay off debt. For me, that meant acknowledging that I had survived before I got a raise, so I didn't really need the extra money. I don't recommend being a scrooge; go ahead and reward yourself with a small portion of any raise, but you know where the rest goes: your 401(k), IRA, or other retirement savings account. If you're not contributing the maximum amount to tax-deferred retirement accounts, start now.

Don't buy the biggest house on the block. I have noticed that younger boomers are becoming more attuned to needs versus wants. Up until 2008, folks were buying the biggest house they could afford because real estate was an "investment." Houses weren't just homes, they were moneymakers—or so we thought. If you've opened a newspaper in the last five years, you know that's no longer true.

My son and his wife just bought a new house—a nice home that meets their needs well. They really liked another model that cost $25,000 more because it had one more bedroom. A spare bedroom would have been convenient when grandparents visited, but then again the house would have been too big in ten years or so.

They made the right decision. They saved the $25,000 as well as the interest on a higher mortgage, as they had already made the maximum down payment they could afford. They'll be just fine without the spare bedroom; that's what air mattresses and hotels are for.

Use some common sense. I've made this same mistake more than once: I'd decide to get serious about diet and exercise and go way overboard. On day one, I'd exercise to the point of exhaustion and cut my caloric intake in half. By the second day, I could hardly move, and I was starving to death (at least it felt that way). By the third day, my commitment would vanish. Had I paced myself, I would have been a lot more successful.

The same principle holds true for paying off debt and saving. For most folks, the best way to start is by withholding incremental amounts from their paychecks. Many employers will do this automatically and put the money in your 401(k) or IRA. Tackle debt the same way: cut up your credit cards and start paying a little extra on your regular payments. It is amazing how quickly you can make progress.

Become an educated investor now. It is easy to think, "Why do I need to learn about investing when I don't have any money to invest?" There are two responses to that question. First, you don't want to wait, because from day one you want to take what little capital you can start with and invest it wisely. And second, I found that the more I read about investing, the more motivated I became to have money to invest. The thought of my money working for me instead of the other way around sounded quite appealing. After all, isn't the goal to accumulate enough money and invest it wisely so we don't need to work at all?

One of the fun parts about being a grandparent is reading bedtime stories to the little ones. It is wonderful one-on-one time, and the little guy always gets to pick the book from the stack. Darned if one of my grandkids didn't pick The Tortoise and the Hare for me to read during a recent visit. As I read him the book, I realized how much the fable applies to us. Both the Tortoise and Hare want to get to their goal, but their approaches are quite different. It looks like a lot of baby boomers who became parents later in life will have to start slowly and steadily plod along. We all know who wins the race in the end.

Some of my regular readers are already retired, and some are a few years out. The retirees look to us to help them make their money outlast their lives. One of the quickest ways to learn how is by watching our timely video event—America's Broken Promise: Strategies for a Retirement Worth Living.

Some of today's top minds discuss how to make sense of the challenges facing savers and seniors alike. They also give you actionable recommendations on how to make your retirement about thriving, and not just surviving… no matter how old you—or your kids—are.

The presentation is hosted by my colleague, David Galland of Casey Research, and features John Stossel, formerly on ABC's 20/20 and now with Fox Business Network, David Walker, former Comptroller General of the United States, Jeff White, President of American Financial Group, and me of course.

This is the one event you must see to ensure you retire on your own terms. Use this link to find out more and to sign-up.

Related Articles
  1. Investing

    Getting Shocked By Utility Stocks

    Utility stocks are traditionally thought of as safe investments, no matter what happens at Wall Street. A recent analysis shows that this isn't really the case.
  2. Retirement

    Are You Really Retired Just Because You Stopped Working?

    Retirement doesn't have to mean the end of working, it can be just the end of working to get by every week. Retirement should be about working only if you want to, not because you have to.
  3. Retirement

    How To Cut Your Mutual Fund Fees By Up To 90%

    Most mutual funds don’t come close to beating the indexes they’re compared against. And yet they carry steep fees for active management. Find out how a little research and effort can cut your ...
  4. Retirement

    5 Ways To Protect And Grow Your Retirement: Whether You’re 45 Or 75 Or Somewhere In Between

    Investors who take steps now can shield themselves from the coming challenges thrust upon retirees.
  5. Options & Futures

    10 Simple Steps To Financial Security Before 30

    Find out how to reach your long-term goals without becoming a tightwad.
  6. Mutual Funds & ETFs

    10 Retirement-Wrecking Moves

    Don't let these common mistakes put a crack your nest egg.
  7. Retirement

    5 Great Timeshare Locales for Retirees on a Budget

    For retirees on a budget, there are affordable timeshares located in charming towns that don't cost a fortune for vacation time.
  8. Retirement

    How Are 401(k) Withdrawals Taxed for Nonresidents?

    As a U.S. nonresident, deciding what to do with your 401(k) after you return home comes down to which tax penalties, if any, you're willing to incur.
  9. Retirement

    The 5 Best Retirement Communities in Asheville, N.C

    Learn about some of Asheville, North Carolina's best retirement communities and discover why the area is such a popular retirement destination.
  10. Retirement

    Why Are Annuities Important for Retirement?

    Understand how annuities work, and identify the benefits they provide for retirement, the most salient being a guaranteed income stream for life.
  1. What are the main kinds of annuities?

    There are two broad categories of annuity: fixed and variable. These categories refer to the manner in which the investment ... Read Full Answer >>
  2. What are the risks of rolling my 401(k) into an annuity?

    Though the appeal of having guaranteed income after retirement is undeniable, there are actually a number of risks to consider ... Read Full Answer >>
  3. How do I get out of my annuity and transfer to a new one?

    If you decide your current annuity is not for you, there is nothing stopping you from transferring your investment to a new ... Read Full Answer >>
  4. How can I determine if a longevity annuity is right for me?

    A longevity annuity may be right for an individual if, based on his current health and a family history of longevity, he ... Read Full Answer >>
  5. How are variable annuities taxed at death?

    If the owner of a variable annuity dies before receiving full payment, his beneficiary must pay taxes on any earnings received. ... Read Full Answer >>
  6. How does a Roth IRA grow over time?

    Your Roth IRA account grows over time thanks to two funding sources: contributions and earnings. While your contributions ... Read Full Answer >>

You May Also Like

Trading Center
You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!