Originally created 05/05/02

How can I motivate myself to save for retirement?

Q. I know I should save more for retirement, but I can't seem to get my act together. Any ideas to help me get going?

A. With people living longer, the coming generations face the prospect of spending more time in retirement. A new study offers some clues on how to make those years more satisfying.

It turns out that how long you save and how well you plan are at least as important as how much money you accumulate.

The survey conducted by Harris Interactive for AIG SunAmerica, a financial services company headquartered in Los Angeles, asked more than 1,000 Americans age 55 and older about their attitudes toward retirement. People fell into four distinct groups:

- "Ageless explorers," so named because they would rather be too busy than risk being bored, were the most optimistic. They saved for retirement an average of 24 years and felt financially prepared. They made up 27 percent of those surveyed.

- "Comfortably contents" wanted a traditional retirement focused on relaxation, travel and other recreational activities. They saved an average of 23 years and made up 19 percent of the survey group.

- "Live for todays" try to be active and adventurous in retirement but know they haven't put away enough, with just 18 years of savings under their belt. They're likely to continue working in retirement. They made up 22 percent of the survey.

- "Sick and tireds" have low expectations for retirement and often have to fight off depression. They've saved for the shortest time, 16 years on average. About half suffered major setbacks such as serious illness or the death of a spouse. They made up 32 percent.

Ken Dychtwald, an expert on aging who wrote "Age Wave," said the results underscore how retirement is changing.

"People are now spending a quarter of their life in retirement," he said. "Among those who are most satisfied, there's a high correlation with net worth. But the highest correlation is with having a plan - saving regularly, thinking about how to invest it, imagining the future."

The lesson for coming generations, he added, is that "If they don't prepare, they could be headed for a miserable old age."

Writer Ellen Hoffman found in researching her book "The Retirement Catch-Up Guide" that people who started earliest to think about retirement had an easier time when they got there.

"If you're 60 and you decide you're going to retire in six months, but you haven't thought about where you want to live, how you'll spend your time - let alone how much it will cost - you're in for a rough transition," she said. "The more you can visualize what you want, the easier it is to make the decisions that will get you there."

Hoffman argues that "it's never too late" to do something to help yourself.

Young people, who have the luxury of time, should begin saving early and regularly, especially in tax-advantaged accounts such as 401(k) retirement accounts and IRAs, Hoffman said.

Older people who are short on savings have to be more aggressive.

Hoffman suggests they look to increase their income significantly, not only to be able to save more but also to qualify for higher Social Security benefits.

"It means going to boss and saying, 'I'm worth more and it's time for raise,"' she said. "Or maybe you have to take on a part-time job or do consulting on the side. It may be that you need to change jobs. You really need to be aggressive about it."

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