Past generations have been able to retire easily, relying on solid pension plans or social security alone. But in 2007 and beyond, with approximately 10,000 Americans retiring every day, employees and employers alike need to be increasingly more resourceful to fund their futures.



Smart retirement planning relies on investments, 401k plans, stocks, tax savings, reverse mortgages, mutual funds and savings. Here are some basic guidelines for getting on the right track.

When you're first getting started, you'll want to envision how you want your retirement to be. While you'll be saving money on gas and eating on-the-run, remember that there will be additional expenses -- notably healthcare -- as you age.

Check with the Social Security Administration to find out what your benefits will be. Go over your employer's retirement and 401k plan. After realistic considerations, you may want to consult a retirement planning calculator.

Some feel most comfortable using retirement planning software. Forbes Magazine recommends Quicken Retirement Planner ($59), Morningstar ($125) and ESPlanner Plus ($199). This option allows you the time and a no-pressure approach to examining your options independently.

If you like having things explained in person, you can ask your banker, life insurance agent, investment broker, accountant or attorney for advice. To avoid the hassle, those planning services are another avenue, although most places charge around $200 per consultation.

Don't rely on social security! Social security only provides for approximately one-third of the average American's retirement plan. Instead, focus on your 401k as the bulk of your savings and invest as much as possible. Consider annuities as a great supplemental retirement plan. Remember, tax-efficient options are increasingly crucial in saving up that nest egg.

Contribute the maximum on your 401k! Putnam Funds did a study in 2005 that found if you earned $40,000 in 1990 saving 2% of your salary, you'd have $40,000 by 2005. However, if had you saved 6% of your salary, your return would have tripled!

Beware of inflation! Ronald Reagan once warned, "Inflation is as violent as a mugger, as frightening as an armed robber and as deadly as a hit man." Many people forget to factor inflation into their retirement planning.

Consider that a $60,000/year lifestyle will cost you $80,635 in ten years and double that in thirty years! Your investment returns should be high enough to cover this pitfall. Most pensions and social security account for inflation and adjust accordingly; however, if you plan to dip into savings accounts or investments, your money will decrease in value over time.

Whether you see yourself on a beach or relaxing at home, behavioral psychologists widely report that "the golden years" bring the highest levels of marital and personal satisfaction.

To ensure you'll reap all the benefits, start goals and calculations today. The old adage "Don't put all your eggs in one basket" is especially true when it comes to retirement planning. By investing in multiple areas, you can avoid all pitfalls and watch your nest egg grow.