There are many fears and risks facing Baby Boomers approaching retirement.

A survey from the Indexed Annuity Leadership Council (IALC) shows that Americans’ in general fear outliving their income in retirement (25%), not being able to maintain their current lifestyle (23%) and health care expenses (19%). However, the survey also found, among Baby Boomers, one in four have less than $5,000 saved for retirement.

Jim Poolman, executive director for the Des Moines, Iowa-based IALC, who is located in Bismarck, North Dakota, tells PLANADVISER one could assume those 25% who fear outliving their savings are the more educated people that have actually done retirement planning. He contends that those who are not planning don’t have that fear because they haven’t yet learned about what they are going to need.

Poolman says understanding the need to plan is step one, along with determining what income will be needed in retirement. “Starting to save is imperative,” he says. “Even for Baby Boomers it is better to start now than put it off another day.” He adds that setting a budget can help Baby Boomers with retirement planning.

Mark Browne, head of the North American channel, global Institutional and retirement marketing, at BNY Mellon Investment Management in New York City, tells PLANADVISER how much a retiree needs for bills and unexpected expenses comes down to individual needs. “Part of a broader retirement plan is to start with the end goal and work backwards to do the necessary savings and investing, and ensure a good spending plan is in place.”

John Davis, director of retirement marketing and insights at BNY Mellon Investment Management in New York City, suggested income replacement ratios are good for savers in their early years to give them an idea of how much they will need in retirement. However, as savers approach retirement, it is not a good predictor because each individual will have his own needs specific to the retirement previously imagined. He suggests this is time for Baby Boomers to be directed to a professional adviser to put a plan in place. He also notes long-term care insurance should be considered, and those employees who have a traditional pension plan will need less from their defined contribution (DC) plans.

Poolman says, if Baby Boomers have a DC retirement plan, the should save in the plan enough to get the entire company match or profit sharing contribution to maximize retirement potential. Any gaps in retirement savings needed can be addressed with a fixed-income annuity. “They can combine a well-balanced retirement portfolio, using diversified assets in the plan, with a more conservative product outside of the plan,” he says.

An annuity can also help with health care costs, Poolman adds. “It’s interesting our study shows only 19% of people are worried about health care expenses. They are not recognizing that people are living longer. Health care costs are going to go up because as they age, they will have more health-related issues. An annuity can help because it can provide a steady stream of income to help pay for long-term care, and some have riders to withdraw for long-term care,” he says.

“One of the bigger points we try to show employees is the likelihood of living to certain ages,” Browne says. “For a married couple at age 65, there’s a 60% chance one will live to age 90 and a 30% chance one will live to age 95.” He says education plays an important role in planning for longevity.

Davis tells PLANADVISER a retiree should plan to live at least 25 years after work ends, conservatively for at least for 30 years. He agrees that deferred annuities are a way to address longevity risk because employees will know they will have some guaranteed income if they do live into their 80s or older.

Baby Boomers also face market risk. Poolman points out that during the recession of 2008/2009, many getting ready to retire lost a significant amount of their investment portfolios, and they didn’t have enough time to completely ride out the rebound. Many worked longer. “As you get closer to retirement, it is so important to look at investments and ask if market dropped 25% how would it impact your portfolio and could you still retire,” he says.

He suggests those nearing retirement need to do an annual checkup of their investment portfolio. Doing so allows them to make adjustments. “As we get older, typically investment instruments used should become more conservative. We don’t have time to outlive market volatility.”

There may also be market downturns after a retiree begins taking withdrawals. Browne says Baby Boomers shouldn’t assume a steady market when planning for withdrawals. As individuals enter retirement, they should work with an adviser to create a broadly diversified portfolio, especially one that seeks to reduce risk in down years, he suggests. “The draw down strategy should be dynamic and flexible. People should spend more liquid investments in the bottom years and give long-term investments time to recover,” he notes.

Davis says people tend to make due, and cut back on spending when markets are down, but people who are poor won’t be able to live the retirement they imagined. “There’s a rule of thumb that’s been out since 1984 called the “4%-rule,” but that was based on markets doing the middle of what they do, and they don’t always do that. The 4%-rule may be a good place to start, but when the market does poorly, retirees will have to cut back and take out less,” he says. Davis suggests plan sponsors can educate participants about what their account balance can buy and what their account balance will translate into for monthly or yearly income.

While one of IALC’s goals is educating people about the value of annuities, even more so, its message is about getting people to take notice that they need to plan, Poolman concludes.