As I become wiser in life, I have developed less tolerance for backing away from goals; big and little goals, short-term and long-term alike. I find myself saying “Man up!” (or if you prefer WOMAN UP!) a bit more to myself and to my kids (which I know they find immediately inspiring). Long-term goals especially can feel impossible to reach. They can seem so far away that it’s hard to stay committed to the dream on a day to day basis. If there is any goal an individual must have, it’s retirement…right? You can’t escape it, as much as we would like to stay 30 forever (or maybe 25, 25 was a great age!) we get older and no one wants to be 70 or 75 and still HAVE to go to work full-time. I am not sure we as humans were designed to do that, so we must plan. We need to think about how will we pay the bills when we are too old to work or better yet when we just don’t want to work anymore! Retirement is one area you have to just MAN UP! Get your spending in order, figure out your income options, pay off your debts and MAN UP!
We have all heard that the earlier we start saving the better off we will be. We have seen the calculations of how we can save $1,000,000 rather easily if we just start early. (If you started at 25 and saved $4,000 per year or about $333 per month, you would have over a million dollars by 65 with an aggressive- at least 95% stocks portfolio.) What if we didn’t start at 25? You can play with the numbers yourself here on Schwab’s Retirement Calculator and see what you need to start your plan. (Charles Schwab is one of the several good and reputable firms where you can begin an investment account. Please review all tax and fee disclosures before opening a new account. I am not paid by Charles Schwab but have experience working with them personally and professionally.)
There is no one size fits all retirement plan, but you need to get started. Consider planning to live longer than the average 85 estimate and avoid using estimated social security benefits in your calculations. More than half of retirement planners underestimate their lifespan. Let social security be a bonus. Set goals for your lifestyle…THEN GET TO IT!
Put your savings on an automatic investment plan and educate yourself regarding what investments to buy (I will post how to do that very soon). Life will get in the way from time to time but as soon as you can get back on track. Be flexible and adjust your plan as needed. As my Dad and grandparents used to tell me, “pay yourself first!” Get through the rough patch and pay yourself first EVERY paycheck, even if it is smaller than you planned. You have heard it all before and you know you need to do it, so do it! My next post will cover basics how to structure your portfolio and how to begin small without feeling overwhelmed. Additional information will be provided for those who have already begun saving and how to enhance their portfolios as well. Man up!
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