So in my last column two weeks ago, I lamented about how precious these last days of summer are and that before we know it, August will breeze by as will the warm hazy days and balmy nights.

Well, summer isn’t over yet but with less than two weeks until those yellow buses dot our roads, our time away from a steady routine is quickly evaporating.

Many Americans are feeling that they have somehow missed the boat when it comes to planning for retirement, that their time to plan is quickly evaporating. I have read survey after survey and they all say essentially the same thing: more than half, and in some cases, over three-fourths of Americans worry about saving enough money for retirement.

Stock market declines, like the one we saw just a few years ago, along with very low interest rates, are a constant reminder to many that there are no guarantees and money can seemingly vanish before our eyes. Although most Americans support home ownership, many believe that they will not be able to afford to live in them when they retire.

Still, many Americans who are nearing retirement have little idea what they will do during their non-working years even though if one retires at age 65, their chances of living a very long life are many more times greater than that of their parents and grandparents. For example, a male at age 65 today has nearly 50 percent chance of living to age 85; for a female at age 65, she has a 56 percent chance of living to age 85. That’s 20 years of retirement planning and there’s still a 25 percent chance of living to age 90.

One reason I have found that retirement planning can send many into a mild panic and fear of not being able to provide for themselves during these 20 or 25 years is because they look at these years in a lump sum first and are overwhelmed with large numbers. If there’s one thing I have learned in working with many people about this important life transition it’s that you should calculate what it’s really going to cost you to live each year and be realistic. In retirement, for most Americans, you aren’t paying Social Security taxes and you aren’t saving for retirement. You aren’t commuting to work and there are other costs that you can cross off your list such as some clothing and even food costs that add up. You may find that by eliminating some of these costs and claiming a higher standard deduction once you are over 65, your retirement income needs might be three quarters of your current pre-retirement income. That’s a good chunk you aren’t going to need. (You may want it, and certainly you can plan for that, but if you don’t have it, you won’t have to change your basic lifestyle).

Of course there are a lot of variables but it’s important to put everything on paper and really come to terms with what you will really need. I haven’t met too many people who love to sit down and calculate their retirement needs but I have met a lot of people who are very grateful after the planning process that they took the time to really crunch the numbers. They know what they need to do, they know what they need to save, where they need to cut costs, they are realistic about their future: they have a plan.

Most Americans spend more time each year planning their vacation than they do planning for their retirement. If you think about it, you might find you are in that camp. It’s an easy camp to fall into. After the summer is over, spend a few hours a month on planning for those 20 or 25 years of retirement. It’s time well spent.



KarenPaul, a Certified Financial Planner in Burlington, has been in the investment business for more than 20 years. She has written for numerous publications on personalfinance and planning issues and works with individuals on money matters.