As folks inch closer and closer to retiring, one thing absolutely everyone asks us at some point during a meeting is, “How do I stack up to other people my age?” The reality is, it doesn’t matter how you compare to anyone else, and besides, you don’t get to automatically retire just because you’re an above average saver, or you’ve hit a certain number. Comparisons to others have no place in retirement planning. What does matter is actually planning out what your retirement will look like on a daily, mundane basis.
This month, we’ll be talking about the emotional realities of preparing for and being in retirement. While we could keep this short and sweet and simply tell you to save enough and then spend a certain fraction each year after you retire, well, we all know there’s more to it than that.
We often encounter pre-retirees who have worked a career for 25 or 35 years, and are suddenly within that three-years-to-three-weeks timeline of retirement. They come into our office seeking advice, they asked for a referral (thanks!) and called us up.
For those of you who are clients with us at Family Financial Partners, you may or may not remember our first few meetings where we asked all sorts of seemingly random questions. We don’t do this to pry – we’re trying to get a good feel for the various financial puzzle pieces you have in your life, and these might be things you haven’t even thought about – at least in terms of how they affect your finances.
In the financial industry, a lot of time, resources and energy have been spent telling the earliest of the Baby Boomers how to effectively create a legacy. For these folks, the investment planning strategy is often, “we’ll take your money and grow it into a bigger pile of money so you can leave a legacy gift.”
After well over a decade in this business, we see certain topics over and over again when we sit down with clients in our conference room. Two of the most common goals people have are saving for retirement and saving for college, and the two can often feel at odds with one another, In most cases, saving for college feels more difficult than saving for retirement, and there are several reasons for that.
For many of us in Generation X, retirement is a life we can’t even imagine. Not that it’s so far away, or that we’re not saving (although many Gen Xers aren’t), but rather, retirement simply doesn’t mean to us what it meant to Baby Boomers and World War II babies.
You might not – but the answer depends on several factors.
The other day, we had some new clients come in for their first meeting. This couple is in their late 50s, about five years from retirement, and they’re super excited because they’ve just paid off their last consumer debt – all credit cards, lines of credit on their home, car payments, and yes, even their mortgage were officially paid in full. If I were part of the Dave Ramsey show, they’d have been yelling “We’re Debt Free!”
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