Do I have enough to retire…will I ever be able to retire?
As you get closer and closer to retirement, anxiety can begin to build up around the idea of whether you’ll have enough money to retire. In other words, “What’s that magical number that you’ll need to be able to live comfortably?” As a general rule of thumb, a million dollars comes to mind for many people, but they’re left with the sinking feeling they’ll never be able to retire because they’re nowhere close to that number.
The thing is that rules of thumb are dumb because they forget all the other fingers! As you begin to look at retirement, it’s important to analyze the specifics of your personal situation. The steps below can help get you on the right track to determine how much you need to be able to retire.
Step 1: Clearly Define Your Goals
The most important thing to ask yourself is, what do you want retirement to look like for you? It looks widely different from person to person. Questions to ask yourself are:
- What’s important to me?
- How do I plan on spending money in retirement?
- What do I want to do in retirement?
Once your goals are defined, then you can begin thinking about and quantifying how much they’re going to cost. From there, you can map out, over the course of your projected lifetime, where that money may or may not come from.
Step 2: Identify Your Current Resources
Now that you have a quantifiable number that’s very specific to you, the second thing you want to look at is the current resources you already have.
Questions to ask yourself are:
- Can some of my retirement goals be funded with a pension or social security?
- How much have I saved in my 401k?
Then, you can match those two numbers up and see if there’s a shortfall.
If there’s a shortfall, you can begin developing a plan to bridge that gap and meet your goals. It’s also important to set expectations and realize that sometimes your goals may have to change.
As you look at your goals and your current resources, you may decide you don’t need to do all the goals you identified above or will need to prioritize them. You may need to lower some of the potential expenses and goals in retirement.
Step 3: Extend Your Retirement Date
If it’s not an option to lower some of the potential expenses to achieve your goals in retirement, then find out if you can extend your retirement date a little bit further. There’s a systematic process and a lot of variables to consider that can be determined with the help of a trusted financial advisor.
Retirement is far too important to get it wrong
You have one shot at it, and it’s probably accurate to say that you don’t want to have to go back and work again.
Hope isn’t a strategy. The best advice is to meet with a trusted financial advisor so that you can determine if you’ll have enough to retire based on your specific situation and not some arbitrary rule of thumb.
Take the time, do the work, clarify your goals, and quantify how much retirement is going to be for you. That way you can go into retirement with confidence that you’re going to be able to do the things that you want to do and knowing that you have enough money to live the life you want.
If you’d like to go through that process with us at Medallion Financial Group, we would absolutely love to hear from you.
Investing involves risks and there is no guarantee that any particular strategy will work under all market conditions or protect against loss in a declining market. Diversification and asset allocation may reduce some risks of investing, but do not guarantee a profit or ensure against a loss in a declining market, they are methods used to manage risk.
At Medallion Financial Group, we believe financial planning is about Family. We have been helping families invest in the future since 1987 through a holistic planning approach. We recognize there are a variety of needs when it comes to retirement planning, plan rollovers, annuities, college planning, life insurance options, and investment management. It is easy to get lost in a sea of choices. Our financial advisors help with the basics and beyond to enable our clients to get the education, advice and management they need to retire with confidence.
Our focus is twofold: first and foremost, we are fiduciary advisors. We stand against any violation of laws, values, and ethics. Second, we treat our clients as part of our family, not only those who call Maryland and Georgia home, but clients across the US who have benefited from our reputation of personal service, integrity, and expertise.
We strive to exceed client expectations – because we have high expectations of ourselves.