Financial Literacy 2007 - Retirement
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5 steps for figuring out your 'big number'

"Why withdraw that little?" asks Baldwin. "Because there are bad years and there are good years. When you draw from your portfolio, you're more susceptible to risk. You are trying to endow income for retirement."

So let's say you had $600,000 in various savings and investments, not including Social Security. If you take out 5 percent of this pool each year, as Baldwin and others advise, that leaves you $30,000 to spend annually in retirement. Another quick and handy way to do the math is simply multiply what you think you'll spend a year by 20. That resulting number is the amount you want to shoot for as a nest egg.

5. Fine tune your strategy

If your savings lags behind your spending requirements, take solace in the fact that you can take steps to close the gap and get on track. And you'll have lots of company. More than half of those who've figured out how much they'll need in retirement have been motivated to contribute more to a retirement plan or make investment changes, according to a study by the Employee Benefits Research Institute.

At this point, many individuals may find that a little guidance can help. A financial planner or adviser can run more sophisticated risk and tax-analysis of your retirement portfolio; help you select the best investments to reach your goal; and meet with you periodically to ensure you're on track to reach your target.

Groups like the Financial Planning Association have listings of planners in your area and you can find fee-only planners at the National Association of Personal Financial Advisors. These are a good choice if you just want to give your plan occasional reviews and tune-ups, and not hire someone to manage your assets day-to-day.

If all of your assets are in employer-sponsored retirement funds, such as 401(k) plans, it may well be worth checking in with those who run your plan. Today, 31 percent of companies offer services for employees to contact retirement fund investment advisers online or by phone so they can get help picking investments or setting contribution levels to help reach their goals. Twelve percent of companies provide in-person investment advisers to assist employees better manage their retirement funds.

Word-of-mouth recommendations from friends and family may be helpful, too. But no matter how you track down help, make sure the person you tap has experience in retirement planning (as opposed to, say, tax planning). The same advice goes for finding someone who's used to helping people in a similar situation as yours, says Dee Lee, author of several books including "The Complete Idiot's Guide to Retiring Early."

"If you're a fireman with a 457 plan, you want someone who understands those," says Lee. "If your brother-in-law is a dentist he may see someone who understands small businesses. Find someone who understands your particular needs."

There are a slew of online retirement calculators to help you set your savings goal. Take a look at these tools, such as the ones at the American Savings Council Web site.

Are you worried about having enough money to retire someday? Or, do you have a plan of action? Share your story

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