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Help for Retirement Shortfalls

San Francisco residents are the most prepared for, and confident about, retirement, according to a survey of the 30 largest U.S. metropolitan areas by money management firm Ameriprise Financial.

Noel Hendrickson | Photodisc | Getty Images

Ameriprise’s New Retirement Mindscape 2011 City Pulse index is based on a Harris Poll of more than 11,000 people between the ages of 40 and 75.

Residents in Sacramento and San Diego were second and third in the ranking, respectively, while Atlanta, New York City and Indianapolis occupied the bottom of the list.

Many residents who were least prepared for retirement expressed anxious feelings about the future and a nagging sense that they hadn’t saved enough money for their golden years. They’re right to worry, but most still have time for course corrections if they start today. Here are some strategies.

The 30s and 40s

For many people in their 30s and 40s, retirement just isn’t on their minds. Day-to-day living expenses, student loan payments, and child-care costs consume most of the available mental energy. It’s never too early to get started, however, and relatively painless options abound.

Suzanna de Baca, vice president of wealth strategies at Ameriprise , recommends employer-based plans such as a 401(k) or a 403(b), as most offer an employer match. The self-employed are advised to use tax-deferred accounts such as IRAs. “Using this type of plan makes it easier for most people to save because that money is socked away automatically and it is harder to access,” she says. “It is more likely you'll leave it there to grow.”

The 50s

While retirement may be off the radar for younger workers, those in their 50s may find it harder to ignore. Their children may have grown up and moved out, which brings a little more financial flexibility, but there may still be credit-card debt, mortgage payments and other outstanding obligations that hamper the ability to save.

The time to deal with these obstacles is now, according to Elle Kaplan, CEO of the money management firm Lexion Capital Management. “Take a look at your investments and ramp up your savings,” she says. “Pay off any credit card debt immediately and renegotiate your mortgage. Each smart money move brings you closer to retirement.”

Nearing 65

If you’re approaching 65 and won’t have enough money for retirement, Ameriprise’s de Baca recommends hiring an adviser.

“A professional adviser can guide you through this planning process and provide expertise and experience to help you get on track,” she says.

Kaplan of Lexion cautions those approaching 65 to stay away from quick fixes. “Avoid investment ‘fool’s gold’ like variable annuities that may look appealing but are really full of awful fees,” she says.

Ameriprise’s de Baca gives similar advice.

“In general, quick fixes come with trade-offs and risk, so we do not recommend any impulsive moves,” she says. “It can be a big mistake to sell your house or assets, drastically change your investment portfolio, or even dramatically change your lifestyle to try and fix the shortfall. The better option is to be rational about your situation. Work with an adviser to understand the reality of your financial situation and to create a plan.”