Our retirement planning advice is based on a mix of setting realistic financial goals and a little common sense

There are two practical solutions to the stressful problem of not having enough money saved for retirement—and neither involves banking on a big stock windfall.

These days, more investors suffer from what you might call “pre-retirement financial stress syndrome.” That’s the malady that strikes when it dawns on you that you don’t have enough money saved to be able to earn the retirement income stream you were banking on.

Some investors in this situation ask us if we can supply one last can’t-miss trading idea that can make up for the shortfall in their savings (brokers sometimes refer to this as a “rescue stock”). This, of course, is unrealistic. If we could find stocks with that rare combination of low risk and high potential, why would we ever recommend anything else?

In fact, if you’re heading into retirement and are short of money, you should move your investing in the opposite direction: in this case your best investments are safer investments. They’re a far better option than taking one last gamble.

Here are two practical solutions to a pre-retirement money shortage. The funny thing is that either one can improve your quality of life in retirement, in addition to your finances.

The first solution is to work longer. Put off retiring from your current position, or continue to work part-time. Or, find full- or part-time work in another field. To start, this can solve a common problem that many retirees fail to foresee: how hard it can be, and how much it can cost, to fill up all the free time that comes with retirement.

Many retirees admit that they fill this time by giving free rein to Parkinson’s Law (“work expands to fill the time allotted for its completion”). Some find that minor tasks take over their lives, so they never get to tackle the more fulfilling projects that they’ve put off until retirement, such as learning another language, taking courses, organizing a stamp collection or whatever.

A part-time job, paid or volunteer, gets you out of the house and provides contact with other people. Many studies suggest these two fringe benefits can prolong your life and keep you healthy.

Straightforward retirement planning advice: Learn what you can do without

The second solution is something you should begin before you retire. You start by doing a detailed study of how you spend your money now. Then, you analyze your findings to see what personal expenses you can cut or eliminate. This too can have fringe benefits, especially if it helps you break unhealthy habits.

For instance, a friend decided years ago that he could no longer afford to smoke cigarettes in retirement, but he couldn’t bear the thought of quitting. So he compromised with himself: he quit smoking what he referred to as “tailor-mades”, and switched to “roll-your-owns” (which were less heavily taxed and way cheaper than ready-made cigarettes).

The rigmarole of rolling his own immediately led him to increase the time between cigarettes, and this cut down his total nicotine intake. Eventually he quit smoking altogether, after having tried and failed many times during his working years.

Smoking is less common today, of course. But cutting out fast food can save the average Canadian anywhere from hundreds to thousands of dollars a year. In retirement, you’ll have time for a cooking class or two, and soon you’ll be able to cook better-tasting and healthier food than you can buy at any fast-food chain. The cost difference between home cooking and fast food can be substantial, and it’s like tax-free income.

Turning frugality into a game is sound retirement planning advice

These two retirement tactics may come hard or easy to you, depending, in part, on your upbringing. People who come from humble circumstances often develop a degree of both frugality and industriousness early in life.

Finding part-time work while in school, and making every penny count, becomes a game for them.

It’s easy to let frugality evaporate in mid-life, when money becomes more plentiful. But some find that if they return to frugality later in life, it’s more fun than ever. It’s a little like taking pleasure from a game that you haven’t played since you were young.

Your enjoyment of, or distaste for, frugality is partly a matter of attitude. But that’s under your control. Don’t think of it as penny- pinching. Think of it as taking charge of a part of your life, so that more of your money goes to things you choose.

Are you faced with the possibility of not having enough money for your retirement? What strategies are you using to get the most in your retirement savings ? Let us know in the comments.