Low interest rates are a double-edged sword: They are great for your mortgage payments but they are bad for your retirement savings. The truth is that when rates are low, the economy is not in good shape. The Federal Reserve lowers interest rates to increase spending and encourage short-term investments. These lower interest rates result in lean retirement for savers because their money doesn’t earn the interest they might have expected.

What retirement investors can expect

Jack VanDerhei, the research director for the Employee Benefit Research Institute (EBRI), warns that nearly 25 percent of baby boomers and generation X investors—who had anticipated having sufficient retirement savings when interest rates were average—will run out of retirement income if the low interest rates are permanent. With that in mind, it is important for investors to account for low interest rates when reviewing their retirement savings plans.

Five options for retirement investors

There are several options for investors who are facing leaner retirements. When interest rates are low, your primary goal should be to protect your income. Determine what you want from your money, including immediate, short-term, and lifetime requirements. Then, make a decision and start a plan.

1. Prioritize finances. Work on paying off accounts with high balances and high interest rates, focusing on accounts that have interest rates in the double digits. You don’t want to spend your retirement income on paying interest—put the money in your pocket instead.

2. Consider alternative investment strategies. Talk to your financial advisor about creating a comprehensive investment plan that spreads out your investments. Avoid long-term money market accounts and CDs—you don’t want your money to be locked up if the interest rates go back up.

Also, avoid risky, high-income investments that promise a large return. Consult with a financial advisor to help you completely understand the product.

3. Ladder annuities. Purchase one immediate annuity each year. Instead of tying up your money in one account with one interest rate, each immediate annuity will have its own interest rate. Fixed indexed annuities create a guaranteed income that you can’t outlive.

4. Choose strong companies. If you are interested in investing in stocks, make sure you are choosing quality companies with strong dividend payments. Don’t take on risky investment strategies without understanding your exposure and potential for loss. Meet with an advisor to create a unique investment plan that caters to you, and limit your volatility when choosing a plan.

5. Be prepared. Don’t rely on a one-size-fits-all approach to your retirement. You need to be ready to adjust your target income and asset allocation each and every year in order to keep up with the current condition of the market and to protect yourself from increases and decreases in rates.

When it comes to retirement, it’s important to be flexible and adapt to change. Otherwise, you might be stuck working a lot longer than you expected—or be forced to live with less.

Jeff Rose is a Certified Financial Planner and Iraqi combat veteran. He blogs at Good Financial CentsSoldier of Finance and Life Insurance By Jeff.