The painful necessity of goal-setting

Jane Berryman looked at the 20 women gathered in a Bryn Mawr living room and asked, "How many of you know the ballpark sum you'll need for your children's education?"

About half raised their hands.

"That's Problem Number One," said Berryman, a financial adviser from Raymond James Financial Inc. On an evening last month, Berryman was conducting a planning seminar at the home of a friend, interior designer Naheed Flake.

Lacking goals for saving and investing - whether for retirement or a college fund - "is like heading out on a cross-country trip without a map," Berryman said. "If you don't know how much you need, how do you know how much you should be saving, and what's the correct [investment] vehicle to use?"

Berryman's sample goals were grim; the audience response, visceral.

Four years at a top private university for a child currently 12 years old: $350,000.

One woman clapped her hands over her ears.

To calculate ballpark retirement fund needs if you are less than 50 years of age, Berryman advised, "Take your household income, combined, and multiply by 25."

"Oh, my god!" someone blurted.

Berryman handed out simple work sheets for calculating needs for retirement and college funds and urged the women to complete them. "The results will depress you and that's OK," she said. "This is like going to the doctor. Wouldn't you rather know now what's ailing you, rather than not knowing?"

Retirement planning is not just for the wealthy, Berryman said.

She described a single mother of two who came for advice a decade ago at age 30, when she was earning $29,000 a year as a receptionist. Assuming an inflation rate of 4.5 percent and a retirement age of 67, Berryman calculated that her client needed to save about $325 a month to have the $1.5 million she needed to retire within her existing lifestyle.

"Very, very difficult, but it can be done," Berryman said. "How? Go home. Make a date with your spouse this weekend to draw up an honest monthly household budget." Use banking, checkbooks, and credit card statements to categorize three months of expenses, and then identify and trim variable expenses to save more, she urged.

Berryman's client stopped her "budget leakage" by packing lunch each workday. "Working with her these last 10 years, my client has a six-figure retirement fund already," Berryman said, adding, proudly, "She's a saver.

"This can be done, but you've got to have a plan."