Nine Retirement Planning Goals for '09

By Dave Carpenter -- AP Personal Finance Writer

CHICAGO (AP) — Exercise more, stop smoking, lose weight — all are excellent ideas for 2009 for those who need to prod themselves in those areas.

But instead of making the traditional New Year's effort to shed 15 pounds, usually in vain, how about aiming to trim your spending by 15 percent?

It's a worthy goal for anyone, but perhaps particularly for those nearing retirement age. With fewer years to let their investments recover from the biggest stock-market decline in decades, more immediate steps may be necessary to help keep finances in line.

"The money saved can be used to pay off debt and increase retirement savings," said Mitch Franklin, assistant professor of accounting at Syracuse University and an advocate for cutting back by 15 percent.

Here are nine financial resolutions for '09 with extra relevance for retirement planning, as recommended by a variety of personal finance experts:

1. Reduce your spending by up to 15%.

This is a good time to get a handle on your expenses and determine what can be reduced or eliminated.

Larry Reno, 62, didn't wait for New Year's to take the plunge. Startled into action by the market's plunge, the retired civil servant from from Fayetteville, Ga., has slashed household spending for him and his wife Cindy by 10 to 15 percent since mid-September.

The Renos achieved it without taking a machete to their spending budget. They switched to a discount store for their grocery shopping, consolidated errands into a single trip, ate out less often, and signed up to be "secret shoppers," or mystery shoppers — getting paid to evaluate retailers. Instead of spending over $100 to replace Larry's old dress shoes, he got them resoled for $37.

Reno says the spending reductions provide flexibility to make sure money is available when truly needed.

"It makes me feel good when I know that I'm saving a little bit of money and I won't have to cut back on money for other things," he said.

2. Don't panic.

"People should resolve to stay calm and not make any hasty decisions," said Tahira Hira, a professor of personal finance and consumer economics at Iowa State University.

Putting blinders on and refusing to open financial statements probably isn't the best way to achieve that calm, however. That might mean missed opportunities to make a sound decision about allocations or investments. Nor is pulling back on all investments indefinitely, especially when it comes to 401(k) or other retirement plans.