Don't sugarcoat it

Like investors everywhere, some of Stephen J. Campbell's clients are coming up short of what they wanted to save for retirement, and need some advice. “I think everybody in some respect is a little more worried than they were five or 10 years ago about their retirement savings,” said Mr. Campbell, a principal of Campbell Financial Services. “A lot want us to tell them they can do what we know they can't do,” such as spending as much as 8% of their retirement nest egg each year. From 2007 to 2010, median American family income, before taxes, fell 7.7% and median net worth fell 38.8%, according to a Federal Reserve report published June 11. Nearly half of Americans in a recent TD Ameritrade Inc. survey said they no longer look forward to retirement, because they don't have enough saved. One problem Mr. Campbell sees is that many older Americans won't have paid off their mortgages by the time they retire. “If you can help them eradicate that mortgage, it is a game-changer,” he said. “We have been programmed that debt is a part of life, and it shouldn't be.” Mr. Campbell helps his clients plan a way to pay their mortgage off sooner, perhaps by choosing a used car over a new one or making mortgage payments on a 15-year instead of 30-year schedule. The downturn has forced investors to become more pragmatic, said Lule Demmissie, managing director of investment products and retirement at TD Ameritrade. “People are beginning to understand that they may need to work full- or part time during retirement” in order to make up for any shortfall of savings, she said.