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Senior Correspondent

When Senator (and Baby Boomer) Jim DeMint left the U.S. Senate at 61, his 2010 net worth was just over $40,000. It had dropped to less than half what it had been in 2004. Taking a high-paying job outside government was his way of self-funding his retirement years. Whether he had taken his eye off his finances, or was simply a lousy investor, this Senator was in the same boat as most Americans concerning retirement.

I know, I know. You get tired of me talking about retirement. But every topic I cover touches your money in some way, pushing and prodding — even begging — you to look at your relationship with money.

What’s my purpose?

Regardless of your age, my long-term hope is that I can help you interact with your money in a way that allows you to enjoy a comfortable retirement when the time comes. Anything else is intolerable.

Retirement Report Card

Sadly, most Americans give no thought to what their retirement will look like, in detail, and how they will fund it. They see Social Security as their retirement plan, instead of the supplement it is supposed to be.

There is still time for many younger Americans to increase their savings and investments. But for Boomers, too many are already stuck having to figure out how to survive on their Social Security, plus whatever pension or meager savings they might have.

And what about those younger than the Boomers? How are they doing?

A recent Wells Fargo report says the report card for all middle-income Americans (with incomes between $25,000 and $100,000) is abysmal. Here is what the survey found:

“80 is the new 60.” That’s because 34 percent of those surveyed realize they will have to keep working until they are 80. Or until they are dead. Whichever comes first.

“Most just want to make ends meet.” That’s because 59 percent say their main day-to-day concern is paying the monthly bills and it overwhelms them.

“Forget saving for retirement.” That is because 42 percent say there is nothing left to put towards retirement after they pay their bills. Paying bills is priority number one. Saving for retirement is a distant number two.

What is most stressing is that each statistic, each percentage point, may look like just a number. But it is not. It represents real people: ourselves, our friends, families and neighbors.

Getting the Numbers Wrong

What is worse, people’s perception of what they will need for a comfortable retirement is way off base. Most people age 40 to 59 thought having $210,000 in savings would be enough.

Let’s look at that. Back when it was easy to earn 7 percent interest on investments, that nest egg represented about $15,000 a year to supplement Social Security. But in today’s low-yield environment, all the traditional “safe” investment instruments are paying closer to 1-2 percent. So how far is an extra $2,100-4,200 per year going to take anyone?

In any case, the nest egg needs to be larger. But people also need to have much more knowledge to be comfortable with the higher risk of other investments.

Having a Plan

Only one third of Americans in the prime savings age range of 40 to 59 say they have a plan. So if you go to Whole Foods and stand next to any two strangers, only one of you will have a retirement plan. Why is that important? Because the one with a plan will have saved about $63,000, versus $20,000 for those without a plan.

Having a written plan boosts your belief in reaching your financial goals: Seven out of ten of those with a written plan are confident they will have enough saved for their retirement (compared to 44 percent for those without one).

Why do some people not have a plan? They say it’s because they have so few assets. But that’s not a good reason. Planning is for everyone. No matter what income levels are, or what amount remains at the end of the month, simply having a plan provides the trigger for consistent savings.

How to Succeed at the Retirement Game

Three things greatly influence being ready for retirement:

Having a plan.
Saving more.
Being comfortable making investments.

That calls for you to know where you stand financially. It means developing a plan for your financial future, which doesn’t need to be elaborate. (Even writing down your planned retirement date and how much you need by that date is a start!) And it means being willing to learn some things.

It doesn’t matter what age you are. At 30, you have more time to get your nest egg in place. But, at 55, you can still make a material difference in how you will spend your later years. Would you rather be enjoying a comfortable retirement or greeting customers at a WalMart when you’re 79?

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