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Coming up with "your number" - the amount of money you will need to retire comfortably - is a preoccupation for many.

Some financial services have encouraged the quest, most memorably ING in TV commercials showing baby boomers with bright orange numbers with dollar signs above their heads.

The concept has gained urgency in recent years, especially after two market meltdowns that eroded retirement savings and confidence alike.

But it may actually be counterproductive. Rather than a decades- long, potentially futile effort to reach a huge number, you may be better off setting achievable benchmarks along the way.

That's not to say that setting financial goals for retirement and trying to reach them isn't important. Many people, after all, are on pace to run low on cash in retirement, which will leave them needing to rely on Social Security checks that average only about $1,100 a month.

About 36 percent of early boomers alone are at risk of not having enough money to pay for basic expenditures and health-care costs through 20 years of retirement. That's based on an analysis of recent retirement savings, housing equity and other data by the Employee Benefit Research Institute.

There's a problem, though, with attaching a single, large number to your aspirations. Coming up with a reliable number for a retirement savings goal is tough enough. Reaching it may feel impossible. And that can be deflating.

"Looking at a monster number and thinking 'I'm never going to get there' causes a lot of procrastination," says Anne Arvia, senior vice president of retirement plans for Nationwide Financial. "It can be overwhelming."

If your retirement savings strategy is built around reaching a particular number, you are probably at greater risk of having it derailed.

Cathie Collins, 51, of Littleton, Colo., has been calculating her "magic number" since she was in her 20s. Relying on financial advisers and planning tools, she calculated it at $1 million, and later $1.2 million, in order to maintain the same standard of living in retirement.

She did all the right things financially: living frugally, saving aggressively, investing regularly, fully funding her retirement plans and paying off high-interest credit cards.

With a six-figure income as an information technology consultant, Collins seemed destined to reach or exceed her number. Then a series of life events set her back: divorce, some bad investments, the market crash that wiped out as much 40 percent of her savings and, last year, a layoff.

Instead of being three-quarters of the way to her savings goal, as she said her guidelines suggest, she's only about halfway there.

She still tracks her progress occasionally through some of the many online retirement calculators. Some help you calculate your number, and others chart different paths to retirement security.

Collins is honing in on other things now, such as paying off the mortgage on her condo, maintaining a healthy emergency fund and managing her stock portfolio more closely, guided by a Vanguard financial planner.

"I'm not as obsessed about it as I used to be," she says of her number. "I've already accepted the fact I won't hit it. But I do think it's worth striving for." 

(c) 2011 Tulsa World. Provided by ProQuest LLC. All rights Reserved.  A service of YellowBrix, Inc.

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