Stop Worrying and Do Something

One day, I hope I'll read a survey stating that 98% of women are on track for comfortable retirements, that 87% of them own their own homes, that only 1.3% of them carry sizable credit card debt, and that the majority of them are investing effectively via the stock market.

Alas, that's not going to happen this year. Instead, the results of Harris Interactive's ShareBuilder 2007 Women & Investing survey featured data like this:

That goes for men, too
Before you shake your head at these worried women, stop a second and realize that although the numbers may be more depressing for the women, they're still not that rosy for men. Nearly one-third of men worry "all the time" about money. 45% of men have no financial game plan at all. One out of roughly every six or seven men doesn't participate in a work-sponsored retirement plan, and envisions a not-so-cheery retirement.

What to do
This situation is depressing, but it's fixable. For one thing, you can start spending less. Would your quality of life really suffer if you surrendered your subscriptions to those premium cable channels? That could free up $25 per month, or $300 per year. Invest that $300 for 25 years, and if it grows at an annual average clip of 10%, it will become more than $3,200 -- just from one HBO-free year. If you end up living off withdrawals from that $3,200 in retirement, it can contribute a full $130 annually -- for, say, 30 years! That will amount to a total output of $3,900. And that's just one small example of how you can cut expenses and save.

Another strategy is to quickly save and invest any new money that comes your way, before you get a chance to spend it. For example, if you get a raise at work, you might allocate that extra money to your retirement account, leaving yourself living off the previous amount you had. You won't feel much of a change, but you'll be investing considerably more. Come tax time, if you get a refund, consider plowing that directly into your retirement account, too.

Be efficient
One key thing to keep in mind is to be efficient with your investments. If you've saved a lot of money for a retirement 20 years in the future, but you have it all invested in CDs earning 2%, you're not doing yourself a huge favor. (At the very least, find a better-paying CD -- there are loads of them.)

Over long periods, the stock market is almost always the most rewarding place to invest. Even a simple S&P 500 index fund will do; that slice of the market has averaged annual returns of 10% over the long haul. You might also seek out strong dividend payers, such as Eli Lilly (NYSE: LLY) and its recent 2.9% yield, Dow Chemical (NYSE: DOW) and its 4% payout, and Wells Fargo (NYSE: WFC) with its 3.6% yield.

Taking action now will help you worry less -- and give you less reason to worry. Learn more about retirement planning, and start crunching some numbers to see where you are and where you need to get.

© 2007 Universal Press Syndicate