Cici says his "number one goal" is to go through client budgets and show how clients can save money - they just need to manage their money better and stick to a plan. He says younger savers can especially benefit. "Take a 22-year-old who saves an extra $400 per month and invests the proceeds and garners an 8% annual return," Cici says. "At age 67, that retirement saver will have cumulated $2.1 million."
"But if they miss saving from ages 22 to 30, they'll lose $1 million in potential savings," he adds. "That has nothing to do with investment performance, but with people not saving money and engaging in good financial behavior."
Some money managers disagree with the notion that client spending trumps client investment returns.
"I think the returns are more important," says Leonard Fox, a financial specialist at Scarecrow Trading in Savage, Minn.
Fox says there is a tendency to accept mediocre returns, because investors often feel that they have no control over the financial markets. "Making the effort to find stronger returns can be exhausting and difficult, but there are a few places that can help," he says.
Fox says his firm's equity strategies are third-party tracked by two sources, which is a big help in maximizing returns. "I use Theta Research and TimerTrac," he says. "Both track investment picks from professional money managers, advisors and average Joes trading on their own time."
"I think you solve the returns challenge first and then find the motivation to work on your expenses," Fox adds. "For example, skipping that $2.50 cup of coffee every day would turn into $640 -- based on the Rule of 72 -- in 30 years. Now that's incentive."
Yet with too many retirees underfunded with their retirement savings, the idea of looking into personal spending cuts seems like a no-brainer, and should be a priority for financial advisors.
"Working people, versus people already in retirement, still mistakenly believe that Social Security or even an employer's pension plan will cover their retirement needs," says Kirsten Curry, president of Leading Retirement Solutions, in Seattle.
The fact is, Social Security is merely meant to provide a minimum retirement savings foundation and traditional Pensions Plans have dwindled, Curry says. "Consequently, you're ultimately responsible for the comfort level of your retirement and being financially prepared for not just Social Security planning, but also personal savings, investment returns and private retirement plan benefits," Curry adds.
The takeaway? The more you cut spending, and the more you start saving, the better your retirement savings.
That sounds like a winning recipe for any retirement saver - as long as he or she recognizes the importance of a household spending budget, and who has a financial advisor standing by to make sure they follow it.