Everyone recognizes the need to save for retirement but certified financial planner Bruce Hagan says most of us have too narrow a focus with our retirement planning. He says many people tend to concentrate on just one aspect, investment returns.

If you were going to buy a small tract of land, Hagan explained, it might be important to walk it and look at each tree, but it would also be great to go up in an airplane and look at it from way up high and see what's all around it. I'm talking about the airplane view of retirement planning.

In the airlane view, Hagan says we would see there are 7 major forces that affect whether or not we'll have enough money to live on when we retire, and interestingly, some of these forces we can control, some we have limited control, and some we have no control over.

There are three forces or factors that we can control. They are: 1. How much to invest (you can consume now or save to consume later). 2. When to retire 3. Retirement Lifestyle (how much annual income will you need in retirement).

Both investment return rate and tax consequences are things we have limited control over and can be influenced by asset allocation and tax management. How much risk should you take? Do you set up a tax deferred retirement account?

The two items we cannot control are inflation and life expectancy. Inflation is a huge factor beyond our individual control and planning would be much simpler ,albeit more frightening, if we had an expiration date stamped on our foreheads, but that 's not the case.

Next time we'll talk about the importance of creating a formalized plan that takes all seven forces into account.