Jan 11, 2020
This week, the theme is how much money do you need to retire?
Each day this week, I’m breaking down this really big and important question into bit-sized pieces to help you better understand what it will take to retire with confidence, why the answer to this question is different for everyone, and how you can answer for yourself: How Much Money Do I Need To Retire?
Yesterday, I talked about a quick and easy back of the envelope way to calculate how much money you need to retire, and today I’m diving a little bit deeper to urge you to go deeper and spend the time and effort to go through the process of calculating how much you need to retire.
Retirement is one of the most important financial decisions you’ll ever make, and in order to transition into retirement with confidence, there is no replacement for a comprehensive retirement analysis.
A detailed retirement analysis uses technology and important data provided by you to live your retirement 1000 times to help you answer one very important question: Will You Run Out Of Money in retirement?
It’s critically important. You may discover that you need to work another year or 2 or cut back on your travel budget, wait a couple more years to take social security, or work part time to make the numbers work and the last thing you want to do is transition into retirement not knowing that.
So instead you retire, drain your portfolio, then have to drastically cut back on your lifestyle 10 years in because it became clear to you that you don’t have enough money to make it 10 more years in retirement without moving in with your kids.
The ideal time to do a detailed retirement analysis is 3-5 years before retirement, since you are close enough to retirement that the numbers are pretty accurate, but still have enough time to course-correct if you need to. Just don’t do it after you’ve given your notice.
If you already work with a financial advisor, many of them offer this service as part of their ongoing work and don’t charge for it. Or you can usually pay a financial planner a flat fee to do this for you if you’re not working with someone.. Just make sure you work with a fiduciary that you trust, who isn’t just using the opportunity to upsell you on life insurance or an expensive long-term care policy.
When your retirement is on the line, don’t make the mistake of making that important transition without going through the process of a detailed retirement analysis to see if it all pencils out.
That’s it for today. Thanks for listening. Tomorrow, we’re going to recap the week and I’m going to give you a little preview of next week’s theme.
My name is Ashley Micciche and this is the One Minute Retirement Tip.
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