Most of the mail comes from self-employed people who broke the number one cardinal rule of self-employment - they didn't pay themselves first. They put everything back into their business. This predicament is a common one. The Employee Benefits Research Institute reports that more than half of the self-employed aged between 45 to 54 have saved less than $50,000 for retirement. A recent Fidelity study found that the average baby boomer is on track to replace just 60% of his or her current income in retirement, even with help from Social Security and pensions.

Why are we so unprepared? The simple explanation to this question is that we as baby boomers are a generation of grasshoppers who fiddled away our youth when we should have been saving. You could say that the financial pressures we all face have made it very tough for us to save. The list normally starts with college fees and helping aging parents, higher prices for housing and medical insurance. We baby boomers have never been one for self-denial If we wanted it, we got it.

You've all heard this advice before, save as much as you can in an IRA or 401K plan. At 50, you are more than likely to have entered your peak earning years. Let's say you channel an annual 3% raise into a retirement plan. That's another $2,250 in savings if you're making $75,000 a year. Saving the equivalent of an extra $10 a day in an IRA or 401K will increase your savings by more than $100,000 over 15 years if your investments earns you 8% a year.

The IRS rules allows workers over the age of 50 to put more money into individual retirement accounts and workplace retirement plans. For 401Ks, this catch-up provision brings your maximum contribution to $20,000 a year. Assuming you're eligible, choose the immediate tax break that comes with a deductible IRA rather than a Roth IRA's tax free withdrawals. "If you're behind on retirement saving, your tax bracket will probably be lower in retirement than it is now," reasons financial planner Greg Schultz of Retirement Planning in Walnut Creek, Calif. The immediate tax break is worth more to you."

If, like most of us, you haven't managed to save to much by 50, it's more likely because you spend more than you can afford. There's a silver lining to this, the worse our spending habits, the more room there is for improvement.

The first thing to do is create a budget. If you already have one, revise it to reflect your new goals and target. You should organize your outlays by category, and try to identify the areas that are stopping you from reaching those goals and targets. Try to stop the wasteful or bad habits and chances are over the last five decades you have developed a few.

Whatever you do, you must save more, downsize, rethink your retirement age - it's time for action. Once you get started, you'll going to feel much better, and for good reason. Just facing the issue head on will give you hope. There's no need to be fearful of the future anymore.

Your” Money Matters By Carl Hampton the bestselling Author of “From Credit Despair To Credit Millionaire”

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