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June 25, 2007


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People plan vacations, moving, taking a new job, weddings, parties, and all sorts of things. We all understand that it is easier to make anything complex happen more smoothly if it is planned. That's really the secret to retirement. You have to plan to do it. And it is also the pitfall that many people fall into. At some level they realize that they aren't doing what they need to get there. They know they have to give up something from their current lifestyle and they don't want to face it.

I started planning for retirement the day I was first eligible to contribute to a 401(k). I could have done it a little sooner through an IRA, but I didn't waste decades. I am not a paragon of financial virtue. I didn't max out my contributions in my early 20's. I contributed enough to get all of the matching funds my employer would give me. As each year's benefits paperwork came around, and after each raise, I increased it a little. Not enough to hurt. I couldn't have done it without my wife's help. Today, my wife and I are maxing out both of our 401(k)s and a Roth IRA for each of us.

Paying down debt is better than adding to it. Saving is better than not saving. Saving a little more is better than saving a little less. Don't ever let the fact that you don't know how you are going to come up with enough money today stop you from starting your savings and debt reduction. Start now. Set a goal to make next month's balance better than this month's, this year's contribution larger than last year's, even if it's just a little.

I think its funny that the media is finally catching on to something I've been thinking and saying for years. All the hype about the retiring boomers is just that - a whole lotta hype. Most boomers will keep working for as long as their health will permit - a few out of choice, most out of necessity. The big retirement wave is going to be delayed by about a decade for this reason. I'm a tail boomer, and I can tell you that us boomers start everything late: we married later, finished our educations later, entered the workforce later, had kids later, and started saving for retirement later than we should've. We were too busy finding ourselves. C'est la vie.

The next big headlines starting to trickle out are how the adult children of boomers will soon be saddled with most of the costs of taking care of their parents. That's the real boomer retirement plan.

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