Wayne Slater-Lunsford’s parents enjoyed the classic, secure American retirement. When his late father, a career Air Force officer, retired in 1963 at age 50, he and his wife settled in California, where they spent the rest of their lives supported by Social Security and a Veterans Administration pension. “They lived modestly but comfortably,” Slater-Lunsford says. “They gardened together, and my father tinkered around the house.”

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The retirement that Slater-Lunsford, 65*, is facing couldn’t be more different. The Lancaster, Calif., aerospace technical writer never stayed long enough at a company to qualify for a generous pension, so at 40 he began contributing to his employer’s 401(k) program. He was on track to retire at age 68, but three years ago Slater-Lunsford lost his job and couldn’t find another. The breakup of his marriage further strained his finances, and a 2015 cancer diagnosis made finding well-paid employment even tougher. Slater-Lunsford declared bankruptcy, put his home up for sale, and today lives on about $1,500 per month from Social Security, along with $500 per month from the principal of his 401(k). “My future possibilities are limited,” he says. “Had I had a clue and started saving early, I’d be in excellent financial shape today.”

If there’s any consolation for Slater-Lunsford, it’s that his daughter, Jessica Callenback, 36, an airline technician, and son, Michael Slater, 29, an administrator for Los Angeles County, have been saving prodigiously since they started working. “We learned that you’re on your own when it comes to saving for retirement. If you don’t do it, no one else is going to do it for you,” Callenback says.

New Retirement Realities

If you were young and working in the ’60s, ’70s, and early ’80s, you probably thought your own retirement would be the traditional life-of-leisure kind—to the extent that you thought about it at all. In 1983, 56 percent of American workers—and 80 percent of those making $20,000 or more—could expect an employer-provided pension, according to the Social Security Administration.

That was then. Just a quarter of Americans working today—most of them union members—have the security of a pension, according to the U.S. Bureau of Labor Statistics. Over the past 30 years, pensions have been replaced by workplace-based savings plans like 401(k)s, which took much of the financial burden off the employer and shifted it to the employee. Many of us have spent years trying to figure out how to manage our 401(k) plans, making costly errors along the way, such as choosing high-fee investments or prematurely withdrawing money. “Managing your own 401(k) is like doing your own electrical wiring,” says Teresa Ghilarducci, professor of economics at the New School for Social Research in New York City. “You know you’re doing it wrong.”

Now that the era of the gold-watch goodbye is clearly a thing of the past, a host of new forces are altering the traditional approach to retirement planning. Rising healthcare costs and historically low interest rates for fixed-­income investments, for instance, may mean that many of us will have to dial back our lifestyle expectations. But other changes are more positive: Market innovations, such as target-date retirement funds and computer-based robo-advisers, are helping us make smarter, low-cost investment choices.

This altered landscape will have the greatest impact on younger workers, particularly millennials, born between 1982 and 2000. But even if you’re just a few years away from retirement, there’s still time to grasp the new realities, implement the strategies recommended here, and create a more secure retirement for yourself.

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Editor's Note:
This article also appeared in the January 2017 issue of Consumer Reports magazine.

*On November 4, 2016, after this article had been completed, Wayne Slater-Lunsford passed away. We regret his loss and send our condolences to his family.