Earlier this year, CNBC reported that two out of every three Americans are on track to outlive their retirement savings. And many have nothing saved at all. Although few people invest enough for retirement, many middle-aged folks plan on living to ripe old age. They now understand the need to invest a portion of their income to fund their golden years.

The good news is that it is never too late to start. But before studying IRAs, 401(k)s, asset allocation, and tax implications, there are a few fundamentals to consider.

Monthly Budget

Telling your money where to go at the beginning of the month helps prevent running out of it before the end of the month. Established in the monthly budget should be the amount to be invested. But first, some other basic protections need to be in place.

Insurance

Many people do not have enough life insurance. Middle-aged individuals with dependents should have ten times their annual income in life insurance protection. Term life insurance is very affordable and easy to shop for online. Or call your local agent. Many property and casualty insurers, like State Farm, also sell life insurance.

Proper protection — both adequate and legal — is needed for your cars. An auto insurance agent will be sure customers have the minimum legal requirements of the State they are in. Drivers need to make sure there is adequate coverage for liability, especially those who are high income earners.

Another consideration is having the correct homeowners insurance. Homeowners insurance should be guaranteed replacement cost coverage. Guaranteed replacement cost replaces damaged property with no deduction for asset depreciation and no dollar limit. Be sure to ask for it as not all insurers offer it. Otherwise you risk coming up short financially if there were a catastrophic event, like a fire.

Catastrophic medical coverage that covers the whole family is also essential. Though no one likes to consider it, a bad accident or cancer can lead to expensive procedures and long hospital stays. Fortunately, many have group coverage through an employer. If not, finding a high deductible plan is the most affordable.

Finally, let’s not forget identity theft insurance. According to Dave Ramsey, the average time required to clean up the mess identity theft leaves behind is 600 hours. And 70% of the time it’s someone we know. The best way to combat this is to insure against it. The cost is relatively low.

Emergency Fund

Last but not least is having a fully funded emergency fund. That’s 3-6 months of expenses in a money market account for a rainy day.

Once you have a budget, you’re properly protected, and you have an emergency fund, you’re ready to invest at least 10% of your gross income for retirement. Closer to 20% if you’re starting in the second or third quarter like I did!

Next week I’ll go over starting a Roth IRA and asset allocation.