Re-Thinking Retirement

"Retirement" means different things to different people, but there is no denying that the way Americans think about retirement has changed and will change even more.

For one thing, traditional pension programs have given way to defined contribution plans, such as 401(k) plans, that are controlled by individual employees and do not guarantee a return. Many worry that Social Security is no longer a sure thing. Americans are also living a full decade longer than their grandparents – longer lives lead to longer retirement periods, which in turn require more retirement savings.

If you have estimated your retirement savings needs and been shocked at the number, you are not alone. (Several online retirement calculators can help you estimate your savings needs.) Many people say they give up planning for retirement because the amounts they are told they need seem impossible. Other people find that seeing an impossibly large number motivates them to adjust their saving strategy or re-think what a comfortable retirement can look like.

Whatever your reaction may be, seeing a specific number for the estimated savings you'll need for retirement is important – and can be a great starting place for you and your financial planner to begin developing creative or more flexible plans for your retirement.

Have you come up with a plan to reduce the length or cost of your own retirement? Do you work for an employer who has come up with creative ways to assist workers who are approaching retirement? Join the conversation about retirement and send your stories and insights to CFP Board at mail@CFPBoard.org.

Calculate Your Retirement Savings Needs

Online retirement calculators allow you to simulate different retirement options. There are many online options for calculating the amount you will need to retire, including the U.S. News and World Report retirement calculator, available at www.bankrate.com/usn/cgi-bin/retire.asp?nav=grn&page=calc_home, or the Savings Tool at the American Savings Education Council's Web site (www.asec.org). Using these tools with different settings - such as a retirement date five years earlier or estimated required annual income lowered by a few thousand dollars - may cause significant changes in the estimated amount of savings you'll need.

Share Your Thoughts about Retirement

Have you come up with a plan to reduce the length or cost of your own retirement? Do you work for an employer who has come up with creative ways to assist workers who are approaching retirement? Join the conversation about retirement and send your stories and insights to CFP Board at mail@CFPBoard.org.