We’ve all heard time and time again about the lack of saving for retirement by many Americans. An article by Chavon Sutton (CNNMoney.com, March 9, 2010) quoted a recent study by the Employee Benefit Research Institute confirming that little has changed. The article stated that: “the percentage of workers who said they have less than $10,000 in savings grew to 43% in 2010, from 39% in 2009.” The value of the homes of those surveyed and their pension plans, if any, were not included. Twenty-seven percent of those surveyed had less than $1,000 saved for retirement. Clearly, many Americans will find it very hard to retire comfortably in the coming years. This is the retirement problem most often discussed in the news.

What’s not discussed as much is the other side of the coin: those who have saved a significant amount for their retirement. So why should we talk about their situations? What problems are they faced with? While they too may not have enough to last through retirement, they may also risk underutilizing what they have worked so hard to save.

As financial advisors, it turns out that many of those who come to us have indeed saved well for retirement. The problem they face is determining how much they can safely spend. Many have been extremely frugal, saving every penny they can. They are so used to pinching pennies that they find it hard to spend what they have saved. If they continue to deprive themselves of luxuries they could afford during retirement and leave a substantial sum to their beneficiaries or to charities, all of the deprivation they suffered during their working years will be for naught.

So what should they do? In many cases they need someone to analyze their situation to assess their planned retirement spending. They need a qualified advisor with software that can do sophisticated analysis such as Monte Carlo simulation and show them how they would fair with bad market years early in their retirement. A qualified advisor could run various scenarios with different assumptions for investment returns, inflation and taxes. If they don’t seek expert advice, they’ll likely either overspend or just continue their frugal ways, not knowing if they are spending too much or too little.

Just because you have been successful in saving what you think is a substantial amount for retirement doesn’t mean your retirement is golden. You may actually have underestimated the affect of inflation and be strapped by loss of purchasing power. On the other hand, you may be so careful with your money that you miss out on a richer retirement that was actually within your reach. You have only one life to live. Don't avoid seeking a qualified financial planner to help you plan for this important stage in your life.