In today’s uncertain economic times, financial planning has become critical in order to meet life’s financial goals including retirement. A thorough analysis of the current financial picture will help point the direction toward meeting those goals and will help avoid excess spending. This includes maintaining a rainy day fund, not relying on social security and calculating the amount of the nest egg.What is Financial Planning?Financial planning means analyzing the current financial picture, determining what the long-term goals are and then devising strategies to reach those goals. Strategies can include a variety of things, including automatic deposits into savings accounts, investments in stocks or real estate, or even insurance plans. The key is to make sure those plans are flexible. Not only can goals change, but so can strategies as your situation changes. Marriage, kids and a home all have a way of changing our priorities.The Here and NowHowever, financial planning is not just about the future; it’s about the present. Because this type of planning requires a full analysis of the family’s current financial picture, they know their exact net worth, income, and expenses. As a result, they are better able to manage spending and can avoid living paycheck to paycheck. They will also avoid being caught unaware by massive debt. An important bonus considering the average American carries a credit card debt of around $16,000.Expect the UnexpectedA major component of any financial plan is a rainy day fund. This is a separate savings account that is set aside for emergencies only and usually contains at least three to six months of expenses. The reality is that no one is safe from unexpected illnesses, accidents or unemployment. Insurance, while another important part of the plan, may not cover everything and may not be easily accessed. In fact, some studies have shown that families without such a backup are far more likely to accumulate debt during a disaster.Retirement NumbersRetiring some day? Well, don’t count on social security. Not only is the age being increased to 67 for those born after 1959, but it may not be there. The reserves held in trust to fund social security are expected to be exhausted in 2037. After that income tax will only be able to pay 75 percent of expected benefits. Medicare isn’t any better and is expected to remain solvent only until 2029. As a result, Americans had better get busy with financial planning if they want to have a nice retirement.How Much Is Enough?The answer to this really depends on a person’s standard of living and the goals he or she has. However, some experts suggest that people should expect to spend about four percent of their savings each year. That means if expenses are approximately 60,000 per year, they should have a targeted retirement fund of 1.5 million. Sadly, most Americans are not even close. Those between the ages of 65 and 75 have an average of around $56,000. That means they get to spend roughly 2,200 a year.These numbers suggest one thing – Americans need to get busy financial planning! Analyzing their current financial picture will help them avoid being buried under a mountain of debt and will help keep them on the road to a wonderful retirement, even when disaster strikes. Plus, a failing social security system will not blindside them and leave them penniless. Financial planning is the smart and responsible thing to do.