Is retirement an elusive goal right now?

More Americans are expected to turn 65 through 2027 than at any point in history, as Baby Boomers begin to leave the workforce and collect their retirement benefits. However, as concerns about instability in financial markets loom, some aging Americans may even delay retirement. That's despite the fact that, for the last two consecutive years, the S&P 500 index has seen returns of more than 20%.

"Recent surveys and conversations I've had with friends in retirement point to some optimism about the recent returns on their existing investments, but we're still fielding quite a few questions from those approaching retirement about the efficacy of their investments long-term," said Brandy Marion, retirement plans education manager at BOK Financial^®.

One of the common questions is whether or not Social Security will be available to them when they retire. "There's a real concern about the effects legislation will have on Medicare and the availability of the program, which can be a major portion of a retiree's budget," she said.

Additionally, retirement plan participants are concerned about outliving their savings, especially if they or their spouses will need long-term care or may have additional health-related costs.

The widening gap around retirement savings

As is often the case with uncertain economic conditions, lowest earners are experiencing the strain the most.

As a result, the gap between what lower-income and upper-middle-class earners are able to save for retirement is widening, said Ken Etheredge, director of retirement plans and asset services at BOK Financial.

"There's a large population of people who haven't been able to accumulate enough wealth and are living paycheck to paycheck as a result of increasing costs and stagnant wages," he said. "There really hasn't been a middle ground."

- Ken Etheredge, director of retirement plans and asset services at BOK Financial

Marion said that she often sees lower-income earners forgo retirement savings to help with immediate financial needs, which isn't ideal later down the line when these individuals need their retirement savings.

However, Social Security can help fill the gap, she noted.

"This is where Social Security can really help the more blue-collar workers," she said. "Typically, Social Security covers between 35% and 40% of your income in retirement, but for lower-income workers, that number can be closer to 80%. This means that they might not need to save as much to make up the difference.

"Receiving education around these topics, and knowing your numbers, can go a long way in helping you plan for retirement, no matter your income level," she continued.

Successfully saving for retirement depends on you

However, it's important not to rely on Social Security alone. Despite good intentions, many workers inadvertently sabotage their retirement through that and other preventable mistakes, according to Marion.

"There are a number of ways that people are not meeting their maximum retirement preparation potential, including starting too late or saving too little," she explained.

Other costly errors include failing to capture the full employer match, essentially leaving free money on the table, and improper investment management. Many retirement plan participants don't understand their investment options, concentrate too heavily on company stock or fail to maintain proper diversification across multiple accounts. "Educating yourself on where your money is going is critical to success when retirement finally comes," she said.

Marion also cautioned against taking loans or early distributions, which can permanently damage retirement prospects as a result of missed growth and tax penalties. Additionally, failing to rollover 401Ks once you leave a job can significantly diminish your return as a result of less-than-ideal investment strategies (and missing out on compound growth). She also encouraged retirement savers to utilize Roth IRAs. A Roth IRA uses after-tax dollars, which means retirement withdrawals are tax-free.

Additionally, Etheredge and Marion suggest:

• Understanding the difference between pre-tax and Roth contributions, which will impact not only retirement taxes, but also Social Security benefits and Medicare premiums.
• Paying off debt before retirement.
• Starting to save as early as possible and increasing your contribution by 1% each year, which can compound significantly over time.
• Understanding your investment options and the fees associated with managing your retirement accounts.
• Establishing an emergency fund in a money market account or high-yield savings account to avoid costly early withdrawals or loans from your retirement accounts.

In the end, successfully saving for retirement comes down to one factor: you, experts agreed.

"The most beneficial thing you can do as you look at planning your retirement is to know your numbers and figure out early on whether you're on track or not," Etheredge said. There are financial tools available through retirement planning providers, but he estimated that only a small percentage of those enrolled in a plan take advantage of them.

For Marion, one piece of advice is paramount: "Go to your 401K meetings! There are so many resources available to help educate you and answer questions you have, but you have to take advantage of them," she said.