Stein: Saving for retirement takes nudge ; Day-to-day spending must be balanced with long-term planning

NEW YORK -- Why is it so devilishly difficult to save forretirement? Humorist Ben Stein -- who's an economist by training --thinks he has the answer.

"You've got an angel on one shoulder saying, 'Be prudent andprepare for your future,'" he says. "But the devil's on the other,saying 'No, enjoy yourself right now. Live it up and buy whateveryou want.'

"Let's face it, the devil is much more fun to deal with."

Stein is the spokesman for the National Retirement PlanningCoalition, a group of consumer advocacy and trade associations thatsponsors an annual retirement planning campaign.

His aim this year is to convince Americans that to have acomfortable retirement, they need to better balance their short-term spending with long-term savings.

"I know I had to change my own mind-set," Stein said in aninterview, clad as usual in dress suit and sneakers. "We all buy tofeel good. But now every month I feel good looking at my (financial)statements."

Many more Americans need to change their own psychologicalapproach to spending and saving if they're going to have enoughmoney when they stop working.

A recent study by the nonprofit Employee Benefit ResearchInstitute in Washington, D.C., found that half of all workers havesaved less than $25,000 toward retirement.

The more earnest savers have done better, with workers who haveinvested in company sponsored 401(k) retirement accounts for atleast six years averaging $91,042 in savings at the end of 2004,EBRI found. The account balances of workers in their 60s averaged$136,400, it said.

Longer lives, fewer benefits

That may sound like a lot of money, but it has to last a longtime. Americans are living longer and often face escalating healthcare costs as they age. At the same time, company pensions andretiree health benefits are being slashed, and the Social Securitysystem may not be able to sustain the payments it makes now.

"The devil is saying, 'The government will take care of you, youremployer will take care of you, some mystery agency will come fromnowhere and take care of you,'" Stein said. "You have to know thatyou have to take care of yourself."

The key is to start saving sooner rather than later.

Robert J. Reby, a financial planner based in Danbury, Conn., andthe author of "Retire Without Worry," says that people should beginby estimating how much money they need to support the lifestyle theywant in retirement.

There's no correct answer, he added, saying: "We have someclients that need $1,200 a month and some clients that need $35,000.The most typical is $5,000 to $6,000 a month."

People can seek the help of financial advisers. Or there are anumber of calculators on the Internet for do-it-yourselfers. TheNational Retirement Planning Coalition has a calculator on its siteat www.retireonyourterms.org, as does the nonprofit American SavingsEducation Council, which has a "ballpark estimate" calculator atwww.choosetosave.org/ballpark.

Once you've got a retirement goal, you can step up your monthlysavings to try to reach it, Reby said.

But Reby also believes people shouldn't be overwhelmed by theprocess.

"My attitude is, let's do the best we can with what we've got andlook at the options in our lives," he said.