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Retirement Saving During a Recession | Nightly Business Report | PBS

PBS Airdate: February 23, 2011 Retirement planning when you haven't saved enough and there's little time left. SUSIE GHARIB: As more baby boomers head into retirement, they are finding the recession has made it much harder to be prepared. But while the challenges are greater, there are some simple changes that can help. In tonight`s "Money Profiles," Benno Schmidt explains those changes aren`t just child`s play. BENNO SCHMIDT, NIGHTLY BUSINESS REPORT CORRESPONDENT: Linda Sanchez is doing what she loves and what she hoped would finance a healthy retirement: working with kids. LINDA CARMONA-SANCHEZ, OWNER, A+ EARLY LEARNING CENTER: I envisioned that I would be working here for the rest of my life. SCHMIDT: Her south Florida childcare center once flourished, but no more. SANCHEZ: My center is at 50 percent capacity and I end up having had to subsidize the rest of it. SCHMIDT: That means spending her savings to keep the business going. SANCHEZ: Because the economy is so bad that when parents are unemployed and at home, there`s no need to spend the money to send their children to child care centers. SCHMIDT: Sanchez knows about caring for others. Her severely disabled daughter has required constant care for nearly 30 years, making any financial planning hard. SANCHEZ: I`m looking at retirement with nothing, with no savings, no anything. That`s very scary, it really is. It`s very scary. SCHMIDT: Sanchez` predicament is extreme, but as baby boomers retire, the outlook is alarming. A Washington think tank, the Employee Benefit Research Institute, recently found many are basically clueless when it comes to retirement. A Boston College study concluded 51 percent face retirement with lower living standards. Certified financial planner Ellen Siegel says it`s time for a new approach. ELLEN SIEGEL, CFP, ELLEN R. SIEGEL & ASSOCIATES: We need to rethink what is retirement -- not just retirement age, but what is retirement. SCHMIDT: Siegel stresses retirement has changed. People are living and working longer. SIEGEL: It`s kind of exciting, because it says oh my God, it`s not too late. SCHMIDT: She says start small, even if you`ve never saved for retirement. SIEGEL: One or 2 percent, anyone can do really, because the economy can go down and people will absorb 10 or 20 or 30 percent reductions in spending. SCHMIDT: Once in the habit, saving won`t seem harsh. SIEGEL: We don`t like diets, but we like being thinner. SCHMIDT: Delay retirement and put off Social Security to eventually get larger payments. Make a list of items you must have: health, safety and mortgage expenses. And look at discretionary spending honestly. SIEGEL: I go through my credit card statements once a year, what I spent money on and I go, wow, did I really have to do this, this, this and this? SCHMIDT: And the experts stress something that may sound counter intuitive at least at first -- put yourself first -- something boomers like Sanchez find hard to do when they`re struggling to get by. SANCHEZ: I`ve had to get another job and work another job just so that I can pay my bills and balance subsidizing this child care center. SCHMIDT: Siegel says it`s a balancing act when it comes to spending. SIEGEL: The pleasure of doing those things today against the delight of having a larger nest egg. SCHMIDT: And making the lifestyle changes to ensure a comfortable and earned retirement. In Miami, Benno Schmidt, NIGHTLY BUSINESS REPORT. For more information visit: http://www.pbs.org/nbr/site/features/special/subdir/money_profiles_11_retirement_plan_catch_up/
Length: 03:33

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