An all-too-common approach to retirement planning. Photo: Flickr user blakeimeson.

I get it -- I really do. Sometimes it's just easier to bury your head in the sand and ignore the problems piling up in your life.

Ten years ago, when I began my career as a teacher, there was more than one occasion when I was so overwhelmed I just needed to go home, sleep, and not think about the classroom. As I eventually learned, however, those problems were still waiting for me the next day.

It appears that many of today's workers are taking the same approach to planning their retirements. And yet the solution, though it requires facing the problem head-on, is less painful than they think.

Head in the sand: a common retirement-planning technique
This willful ignorance of retirement planning isn't the result of the dot-com bust or the Great Recession. Rather, it appears to be a trait we Americans have shared for a long time.

The Employee Benefit Research Institute (EBRI) began asking workers a simple question back in 1993: "Have you tried to figure out how much money you will need to have saved by the time you retire so that you can live comfortably in retirement?" Over time, here's what their responses have looked like.

Source: EBRI. 

While there seems to have been a spike in interest in the late 1990s -- probably as a result of huge stock market gains that made retirement planning seem less daunting -- well over half of all American workers have never even tried to calculate the number.

That can lead to serious anxiety about one's ability to cover basic expenses once the Golden Years set in. Though overall confidence has risen since 2009, only 18% of America's workers are certain they will have enough money to live comfortably in retirement.

Source: EBRI. 

That's clearly a problem, yet many of us are choosing to ignore it.

A simple calculation
Just trying to figure out how much you'll need in retirement is pretty easy. In fact, it can be broken down into four simple steps. The result is more of a ballpark figure. For a more specific figure, there's nothing that can replace hiring your own advisor -- more on that in a bit.

Here are the four steps, with my own family's financial situation serving as an example.

  1. Calculate how much you spend per year. My family has spent $57,000 over the past year. This includes everything from housing to food and taxes. In retirement, I actually hope for this number to be lower, as I expect our home to be paid off.
  2. Calculate how much you'll get from Social Security or any pensions. You can find out how much you can expect to get from Social Security by using the Social Security Administration's online Retirement Estimator. Contact your employer for help figuring out pension payments. In my case, my family can expect $3,000 per month -- or $36,000 per year -- from Social Security. Because benefits could be cut by 23% by the time we retire, I'll dial this number down to a conservative $27,000.
  3. Subtract your Social Security/pension payments from your yearly expenses. This lets you know what the gap is between what you'll need and what you'll have. In my case, the gap between these two is $30,000 per year.
  4. Multiply the gap by 25. This assumes you'll be able to withdraw 4% of your retirement savings each year. In my case, I need my retirement savings -- in today's dollars -- to total $750,000.
And that's my "retirement number": $750,000.

Why not grab retirement planning by the horns?
Wes Moss, chief investment strategist for Capital Investment Advisors and host of Money Matters radio show, recently came out with a book titled You Can Retire Sooner Than You Think. In it, Moss takes the results from his extensive survey of retirees and deconstructs the numbers.

Specifically, Moss wanted to identify the traits of people who are happiest with their retirements. One of his key findings was that "happy retirees spend at least five hours a year planning for retirement."  

What do those five hours look like in the real world? In an interview with Forbes' Richard Eisenberg, Moss says:

"Think of it as a total of two hours a year meeting with a financial advisor every six months for an hour each time. The advisor will keep you on track and keep you from making big financial mistakes. Spend another hour on the weekend every couple of months throughout the year maintaining your retirement plans. That's when you ask yourself questions like: 'Are we saving 20 percent a year?' And 'Are we on track?'"  

So that's it: two one-on-one meetings per year and a little elbow grease on the weekends. If finding a financial planner seems daunting, visit the website of the National Association of Personal Financial Advisors, which can locate an advisor near you. Just click on the link and type in your zip code!

You aren't getting any younger, and the sooner you take these simple steps, the sooner you can shake the sand out of your hair and take charge of your retirement.