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What’s your image of a happy retirement? Does it involve lazy days on a beach, traveling the world or pursuing a favorite pastime? Or maybe volunteering? Or are you finally planning to get to all those projects around the house that you’ve put off for years?

Whatever your ideal scenario, you’ll want to make sure you have the financial resources to support it. That doesn’t mean you need to be rich to be content — far from it — but it does mean that you’ll need to plan ahead for retirement and manage your money wisely once you get there.

Keep these five financial secrets in mind as you work toward your version of a happy retirement: Read the rest of this article on AARP.org,

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A just-released report from the Treasury Inspector General for Tax Administration (TIGTA) paints a bleak picture of the retirement prospects for many Americans.

The TIGTA report examined retirement trends over three decades: from 1977 to 2007.

Overall, the government found that Americans are increasingly participating in employer-sponsored retirement plans (like 401k plans), and that the value of retirement plan asserts grew dramatically during this 30-year period.

Despite those positive factors, pension assets – where employers give workers a guaranteed or defined benefit amount – averaged just $62,600 per individual in 2007. For anyone contemplating a long and comfortable retirement, $62,000 isn’t a lot of money.

That’s why the TIGTA concludes that “many retirees will continue to rely on Social Security and other forms of income for retirement and may run the risk of outliving their retirement assets.”

Making matters worse, TIGTA found that “more individuals are withdrawing retirement savings before retirement.”

According to current federal estimates, the Social Security system is currently so badly broken that if nothing is done to fix it, it will run out of money in 2037.

So if you’re counting on Social Security to serve as your primary source of income in retirement, good luck with that.

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Today marks the 75th anniversary of Social Security. For anyone who is putting payroll taxes into this program, there is both good news and bad news. The good news is that in 75 years, the Social Security system has never been a day late or a dollar short. For more than seven decades, the system has paid out promised benefits to workers who’ve contributed to the system, as well as their families. Another bit of good news: The Social Security Trust Fund has $2.6 trillion in reserves, and that money is collecting interest every day.

Unfortunately, the overall outlook for Social Security is far from rosy.

That $2.6 trillion in reserves won’t last forever. Especially with this country running such a huge deficit. Not to mention high unemployment of 9.5 percent. With 15 million people out of work, that means lots of dollars simply aren’t being added to the system in the form of payroll taxes. This is occurring even as more people are living longer, and thus collecting more Social Security benefits for extended periods. All of this helps explain why, if the government does nothing to fix Social Security, the program will run out of money in 2037, according to the 2010 Social Security Trustees Report.

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Q: I am a 53-Year-Old Single Woman Who is Medically Retired. Between Disability and Retirement Income, I’m Living on About $24,000 a Year. I Have a Little Over $90,000 in Retirement Accounts. This is My Only Savings. I Have a Balance on a Business Credit Card of Close to $14,000. The Business Has Been Dissolved and I Want to Clear Up the Debt and Close the Account. My Only Way of Doing This is Selling Some Investments. Do You Recommend Doing This?

A: No, I don’t recommend taking $14,000 from your retirement accounts in order to pay off that business credit card. I would be wary of doing so for three reasons. First, you are medically retired, so you will not likely have any source of earned income for the rest of your life. Frankly, $90,000 is not a lot of retirement income to live on until death. You could live another 30 or 40 years. Also, if you sell some of those retirement assets, you’ll have to be capital gains taxes on them. Sure that’s just 15% (and possibly as low as 5% for people in the two lowest income tax brackets). But I want you to realize that your money will be taxed, meaning you may have to give over to Uncle Sam as much as $2,100 of the $14,000 you’re considering cashing in. Lastly, I’m not convinced that you can’t pay off this debt over time by making some adjustments to your budget. I know that $24,000 a year is not a lot to live on. But have you considered if you can cut any of your existing expenses (namely any luxuries you may be spending money on) and using that money instead to knock out the business credit card debt? I just don’t want you to tap into an already modest retirement nest egg and later regret not having that money to fall back on if times get even tougher or if you need the money for other purposes later in your retirement.

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