70+ and still punching the clock

More people have are having to work into their 70s because they don't have enough money set aside to sustain them in retirement.

Tax attorney Rebecca Walser, said there's a retirement savings gap that's in the trillions--which explains how underprepared people are to retire financially.

"Late 70s, early 80s when we had the 401K rolled out en masse to the United States of America and really accepted by all of corporate America, corporate pensions-which is the way we used to retire from the late 70s before--really went away," said Walser. "The responsibility of providing and retirement shifted from the employer to the employee, but with that shift, nobody said what the employee needed to do. No one said this is how much you have to put aside."

As of 1996 only 12-percent of the companies offered pensions.

She says there are three things people need to do:

1. We don't contribute enough to 401K. Ten percent is not sufficient to put away in your 401K. She said look at every dollar differently when you get paid one dollar--it's paying for your current self, as well as your future self.

“You can’t put 10 percent away for all your working years and expect to live off of 10% for the next 30 years of your life. The second thing is keep in mind the 401K is 100% market-based. And then the final issue is the tax issue,” said Walser.

2. As you get closer to retirement, look up your holdings in your 401K and make sure you're not over exposed to a large market correction. The market is highly volatile. Since the 90s, we've had a tech boom and bust, as well as a housing boom and bust. If you're 10 years away from your retirement, you can't afford to lose 30-40 percent of your portfolio. So, look at your risk holding in your 401K. She said

because the Bear market, which is a 20 percent decline or greater, always comes.

3. Tax issue, if all of your wealth is built inside a pre-tax account, Walser said she sees taxes as the largest coming threat to security and retirement. She said what if taxes go up in the next 20 years and you have to pay all your money to taxes because you put all your wealth in a pre-tax bucket. She said you will need figure out how to leverage and do some strategic repositioning to deal with the taxes.

Of course, there's always a few who don't want to quit because they love what they do.

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