The reality is that Americans are not saving enough for retirement. This is nothing new; but it is often disregarded. Consider the following frightening statistics:

• More than 43% of Americans are not saving at all for retirement¹
  
  
• More than half of workers 45 to 54 have saved less than $50,000 for retirement²
  
  
• Americans are on track to take a 43% pay cut when they retire³

Why are Americans so unprepared?
Jeff Brown at the Philadelphia Inquirer said this in his April 2006 article about why the problem is as big as it is:

"There are lots of causes. Many working people aren't making enough to set aside significant amounts. Also, driving a nice car is a status symbol; having a plump IRA is not."

Many baby boomers are said to be in the "sandwich" generation, which means that they are paying for their children's education costs as well as helping aging parents. This makes it tough to save money for themselves. Some spend more than they can afford and are highly leveraged. Others say that they'll work to their graves so they don't need to save now. Some realize the importance but just don't know what to do or how to begin.

What is the solution?
Retirement planning requires two simple things - investing discipline and regular monitoring.

The best thing that you can do for yourself is save regularly. Take advantage of employer sponsored retirement plans like a 401(k). By adopting an automatic approach, saving becomes much like any other obligation you have, like making a mortgage payment. You may think 401(k) success is all about selecting funds with hot performance. In reality, how much you save matters far more than what your funds return. Ideally, you want to contribute the maximum of $15,000 for 2006, but if you can't do that, you should at least save enough to take full advantage of any employer matching contribution. Most likely you won't even miss the money that you are saving. If your company does not provide a 401(k) or other retirement plan, you can save regularly on your own into an IRA, Roth IRA, etc.

Finally, you should seek professional advice through your Fragasso Financial Advisors financial advisor. He/she can provide retirement planning schedules to illustrate the level of savings you need to enjoy a comfortable retirement. Your financial goals and savings level should be revisited annually to make sure that you're on track to achieving financial independence. Fragasso Financial Advisors is committed to helping our clients achieve their life goals.

¹Securities Industry Association Poll
²Employee Benefits Research Institute
³Fidelity Investments Survey 2006