While People Fiddle, Retirement Planning Burns. Financial Issues, Part 2

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Doing little vs. need to pay attention to Retirement Planning. "Wealth Odyssey" financial tips.

People must start to save more now

As Americans begin abandoning their financial resolutions for the New Year, their retirement planning goals go up in smoke. Their best intentions for the New Year have already reverted back to old habits - spending more and saving less. Wealth Odyssey, a new book by Larry R. Frank Sr., shows people how to find the balance between saving and spending.

Approximately 34 percent of Americans said they would set a resolution related to their finances, however, only 8 percent of those people actually achieved their resolution (including those resolutions not related to their finances) according to a random telephone survey conducted by Stephen Shapiro, president of Goalfree.com, with the assistance of Opinion Research Corp. of Princeton N.J.

Another study from the Yale School of Management and the University of Chicago found that staying focused on the commitment to the goal is key. “For example, opening a new savings account can suggest that a goal of saving more for the future is being actively pursued,” Frank said. “As a result, the person may feel justified on spending more on indulgences. However, the goal is to save more, not spend more – stay focused on the commitment to the original goal. The key to success is to think about the commitment to the goal, not progress made, in other words saving more, not just opening the account.”

Wealth Odyssey and the accompanying website: http://www.WealthOdyssey.com, discuss how to determine one’s current Standard of Individual Living (SOIL) – their current level of spending. The book and website explain the relationship between income, net worth and other financial topics; and how knowing this helps with the unknowns of the markets, economy, Social Security and pensions.

“People must start to save more now,” Frank said. “Wealth Odyssey shows them how to simplify their retirement planning. The mere act of saving more lowers their current SOIL by that amount. This means they need to save less now since their SOIL is less. Ironic, or maybe not so ironic, but saving more helps make the goal more achievable.”

According to the seventh annual Transamerica Retirement Survey, workers realize they have challenges ahead. Along with an increased awareness of retirement comes a dose of reality. For example:

  • More workers now estimate that they will need to save more than $1 million on average to feel secure in retirement (33 percent in 2005 versus 25 percent in 2004).
  • Workers have also increased their estimated retirement age, from a median of age 63 in 2004 to a median of age 65 in 2005.
  • Confidence in retirement savings is down, with only 23 percent of workers feeling very confident that they will be able to retire comfortably versus 31 percent in 2004.
  • 44 percent of participants don't believe they are building a large enough retirement nest egg. Of those, 67 percent say it is because they cannot afford to save more, while 16 percent say they are in too much debt to do so.
  • Further, 24 percent of workers indicated that they don't know how much they'll need to have saved for retirement while 33 percent of those who do know indicated that their estimated need was based on a guess.

"The drop in confidence is a sign that workers are realizing they are going to have to be much more proactive in preparing for retirement and recognize the challenges in doing so," said Catherine Collinson, retirement and market trends expert for the Transamerica Center for Retirement Studies. "Almost everyone needs further education on retirement savings and now is the time to approach the procrastinators who are still in denial."

Let's take the guess work out of retirement planning and make it simple so even procrastinators are eager to start. Moreover, Americans must start to put out the financial fires caused by so much inattention in the past. In order to retire, Wealth Odyssey answers this simple question: "What resources will it take in order to sustain my current standard of living; in order to sustain my spending?"

About Larry R. Frank Sr.

Larry R. Frank Sr., MBA, CFP® has twenty-seven years of financial research and real-life experiences teaching people personal finance. Frank focuses on how to make smart decisions to grow and protect net worth - a simple change in perspective from income-centric to wealth, or net-worth-centric. Rather than make things complicated, his work focuses on simplifying personal finance for retirement planning. Frank has appeared on Global Talk Radio, Nationally Syndicated Radio, TV and Newspapers. He holds a Bachelor of Science cum laude in physics and an MBA in finance.

Wealth Odyssey offers financial tips for retirement planning. The book has been nominated for the 2006 Benjamin Franklin Awards, 2006 Financial Frontiers Awards, 2006 Independent Publisher Book Awards and many others in the business and economics categories. Wealth Odyssey (ISBN 0-595-33720-1, trade paper, $16.95) an "Editor's Choice," is available from iUniverse, Inc., http://www.BarnesandNoble.com , http://www.Borders.com , http://www.Amazon.com or http://www.iUniverse.com . Independent book store distribution available through Ingram Book Group and Baker & Taylor.

Online peek available at http://books.iuniverse.com/viewbooks.asp?isbn=0595337201&page=fm1


Larry R. Frank Sr., MBA, CFP®

Phone: (916) 773-3509

Website: http://www.WealthOdyssey.com

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