When it comes to retirement security, many Americans probably aren’t surprised to learn that American is not number one. In fact, the United States ranks 19th out of world countries in a retirement security index prepared by Natixis Global Asset Management. The news should prompt you to look at your own retirement security, and think about what it might take for you to improve your financial future.

What Goes Into Retirement Security?

When you think about retirement security, what comes to mind? Some of the items that can impact how secure your retirement ends up being include:

• Your nest egg: Your nest egg is the amount you have saved up for the future. When you save up, you usually invest the money using some sort of tax advantaged retirement account, like an IRA or 401(k). How much you save makes a big difference, as does how long you save it. You should also consider your asset allocation. Building your nest egg is an important part of your retirement security, and is especially important because it is the aspect of your retirement that you have the most control over.
• Costs, especially health care: Consider the costs involved with your retirement. As you get ready to retire, you will have certain costs to deal with. One of the biggest costs is health care. Inflation practically ensures that all your costs will rise over time. Health care is likely to rise at an even faster pace. You might need to consider your health insurance options, as well as the possibility of long-term care. You can’t really control costs; the best you can do is reduce your expenses, and build your nest egg to combat the effects of inflation.
• Government safety net: The amount that you can expect from the government is another consideration. The more you put into Social Security, the more you are supposed to get out of it during retirement. However, you can’t depend on the government safety net, whether it’s Medicare or Social Security. Benefits are already being reduced, and you can’t be completely sure what to expect in the future.

You might also be lucky enough to have a defined benefit plan from your work. If you do have a pension, you still might not be able to trust it. Recent bankruptcies have resulted in some pensions not being paid out as expected.

The reality is that there is no way to completely prepare for the future. Your retirement security depends on a lot of factors, and even your nest egg is subject to the realities of the market, and the timing of a potential crash. A stock market crash just prior to your retirement can reduce your retirement security.

What Can You Do to Increase Your Retirement Security?

There is no foolproof way to complete secure your retirement. However, you can take steps to increase your security, and ensure that your money lasts at least as long as you do.

First of all, building up your nest egg is one way you can improve your long-term financial security. The earlier you start, and the closer you are to maxing out your retirement accounts, the more likely you are to weather even a market crash fairly well. If you build up a $2 million nest egg over the course of 30 years, even a crash that wipes out half the value of your accounts still leaves you with some decent capital — and you might even be able to recover somewhat.

Another possibility is to build up multiple streams of income. Your side hustle can provide you with money coming in that might not be as dependent on the vagaries of the market. Look for ways to develop various income opportunities, and you won’t be in as much trouble if one of your revenue sources is disrupted.

Other actions to take if you want to improve your chances of retirement security include paying down debt so you have fewer obligations to worry about, downsizing your lifestyle so that you have fewer expenses, and making sure your assets are protected with the help of appropriate insurance coverage.

You can increase your retirement security, and improve your situation fort he future. However, it takes planning and effort, and you might need to be prepared to take on more responsibility for your finances.

Photo from PT Money.