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Roadblock #5: You lost your job - and got behind on savings

By Scott Medintz, contributor

The problem: In planning for retirement, you probably for granted a steady rate of savings, perhaps even assumed a 401(k) match.

But if you were among the 8 million Americans put out of work by the financial crisis, those assumptions were shot to pieces.

"You can have the best plan in the world," says James Crosson, a financial consultant in Fall River, Mass., "but when you're laid off, the whole thing falls apart."

In the best case, you reduced or halted savings; in the worst, you plundered your nest egg. If you're lucky enough to be back in the workforce, you may wonder how long it'll take to rebuild your savings so you can get out for good.

Solution #1: Downsize expectations. You may still be able to retire on time if you can accept a lesser income, says Crosson. You probably downsized your expenses while unemployed anyway. Use the retirement income calculator at troweprice.com to see what you can draw from your portfolio, given your savings rate and retirement date. Then decide if you can live on that number.

Solution #2: Open your own accounts. Whether or not you can live on less, you'll need to get back into the saving habit. Most companies let new employees join the retirement plan right away, reports the Profit Sharing/401(k) Council of America. But if yours doesn't, start by funding an IRA.

In 2010 you can stash up to $6,000 in an IRA if you're 50 or older. (Remember, there are income limits on Roths.) And if neither you nor your spouse will have access to a work retirement plan this tax year, you can deduct full contributions to a traditional IRA, no matter your income. Those who can save more than $6,000 should invest in index funds and ETFs, which don't incur a lot of taxes.

Solution #3: Supplement with side work. On average, workers 55 to 64 who lost a job between 2007 and 2009 and found new employment took pay cuts of 24%, says the Bureau of Labor Statistics.

If you accepted a smaller salary, you may feel that saving is an impossibility. But you can make it less so if you moonlight and stash the proceeds. Bonus: As long as you earn at least $550 for the year, you're entitled to open a SEP-IRA and contribute 20% of self-employment income before taxes, up to $49,000. That'll help you make up for a lost job -- and lost time.  To top of page

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