How big does that retirement nest egg need to be?

Q: The retirement salary recommended by most experts is 70 to 80 percent of pretax income earned while working. I find that figure nearly impossible to attain for a working stiff. As your salary goes up, you have to save that much more every year and still maintain some standard of living. I suppose the only answer is to live like a pauper and save up the nest egg for old age. If I pay off all my debt, would 50 percent be a more reasonable figure?
C.M., via e-mail

A: You can pick whatever percentage you want, but certified financial planner Michael Bischoff of Bloomington, Minn., thinks you'll be surprised when you tally up what you truly need.

Mr. Bischoff cites a 2004 survey by the American Savings Council, in which 39 percent of retirees said they were spending as much as they did before they left the workforce. Another 13 percent said their income needs were higher.

Paying debts down, or off, is a great way to trim expenses. But even with credit-card and mortgage bills out of the way, Bischoff thinks getting by on 50 percent of preretirement income is difficult.

"In my experience, most people could not cut their expenses in half or live that type of lifestyle when they retire," he says. "Retirees want to maintain their quality of life, not decrease it."

Q: When, if ever, is the time to consider adding gold coins to a portfolio? The Monitor, from time to time, runs advertisements offering gold coins. With the price of gold fluctuating from $430 to $465 an ounce, paying $90 for a single coin hardly sounds like a good investment. What type of liquidity can one expect if you purchase gold coins over time and then decide to convert them to cash?
O.G., Weatherford, Texas

A: Gold holds its value compared with inflation over long periods, but don't expect to get rich on it, says William Suplee IV, a certified financial planner in Paoli, Pa. He prefers a buy-and-hold strategy with gold.

If you pay $60 for a coin weighing 1/10th of an ounce, for example, you're shelling out $600 for an ounce of gold at a time when it sells for about $430. Buying coins in small quantities can boost the price you pay, says Mr. Suplee. You also have to factor in how collectors value the actual coin.

If you add gold coins to your portfolio, Suplee recommends 1-ounce coins. Both American Eagles and Canadian Maple Leafs are popular 1-ounce varieties that might carry a $15 to $20 premium over the intrinsic price of their metal.

To sell, search the Yellow Pages or the Internet for dealers. Generally, long experience in the business is a sign that a dealer is reputable. The American Numismatic Association, at www.money.org, or 800-367-9723, also has a directory of dealers.

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