AGING AMERICANS: MONEY PLANNING A MUST FOR RETIREMENT

Editor's note: This is the fourth of a five-part series examining issues facing Missouri's elderly population.

James and Dorothy Bowers spend less money in their retirement than they did while working as teachers in Southeast Missouri.

"I hope to live to be 100, but I'm not worried about money yet," James Bowers said. "I hope we have saved enough for retirement to live comfortably."

Despite the fluctuating stock market, Bowers said: "I'm not worried about the stock market; we're in it for the long haul. I hope that future inflation doesn't exceed the income we have so there is something to draw from."

For many senior adults, life after retirement isn't filled with assurances of wealth and money. Scrimping and saving remain an everyday chore.

Studies show that most Americans have boosted their savings for the third consecutive year, with the exception of the baby boom generation. Monthly savings rose from $199 to $203 in 1996.

Planning for retirement is a challenge, "but the longer you wait, the more you need to put aside," said Philip Dame, branch manager with Robert Thomas Securities.

Factors like disability, health issues and pension benefits determine how much is needed to survive during retirement. "A lot of people don't plan ahead, and it's late in life that they realize they won't like their situation if they are disabled or when they retire," Dame said.

There are no guarantees and "you never know if you will have enough because things change," said Virginia Lewis.

She and her husband retired in 1979, and have been living off pension and Social Security income since.

"We had to work hard for some things," she said. "Everybody makes choices. But you can't depend on Social Security -- not to live on it."

Predictions abound that Social Security will be bankrupt by 2029 and younger workers now contributing won't receive their benefits.

James Bowers doesn't plan to live on Social Security during his retirement. "You never know, so we've made some good investments in stock and mutual funds," he said. The couple didn't seek financial advice from a professional, but chose to select their own retirement plan.

"We're not invested through any company, but have just studied it and made good choices," he said. "We hope to leave the dividend in the bank and let it keep building."

Many people are able to retire at the same or better standard of living they enjoyed while working, Dame said. "A lot of people I know do retire and seem like they have a better standard of living. But it's not possible if you wait."

Dame helps clients choose which retirement package best suits their needs. "We try to project how much it would take for them to live at a reasonable standard," he said. "You don't have to reduce your standard if you've done a good job of saving."

But saving is key to successful retirement planning, he said. People need to start early, in their 20s, and maximize their plans. "The magic of compound interest still works," he said.

People seem to have more money and are more conscious of it so they are saving more and are more aware of the investment opportunities available, Dame said.

--Some information for this story was contributed by The Associated Press.

SENIOR FINANCES

Americans boosted their retirement savings by 2 percent in 1997. It was the third straight annual increase, according to a survey by the Marketing Research Institute.

Baby boomers -- those age 33 to 51 -- contributed most to the savings gap. Their average savings fell 10.6 percent. Generation X, people between age 18 and 32, increased their savings by 17.8 percent.

The survey predicts that workers leaving the workforce today would need $400,000 in total savings to retire on an annual income of $26,125.

By 1992, the median income of the elderly was more than double that of 1957 fiture. Men earned $14,548 while women earned $8,189.

Social Security benefits were the primary source of income for 63 percent of beneficiaries in 1992. About 14 percent of beneficiaries reported Social Security as their only income.

The percentage of elderly living in poverty declined from 24.6 percent in 1970 to 12.9 percent in 1992, partly because of "catch-up" increases in Social Security benefits.

About 25 percent of the elderly not living with relatives or living alone were more likely to be poor than their married counterparts.

Source: U.S. Census Bureau reports/Associated Press