What if I told you that you don’t have a retirement plan or that your retirement plan is likely inadequate? Would you be surprised or confused?
Most people get a job, sign up for benefits because it’s part of starting the job, and then check their retirement account once a year at benefits enrollment time. In recent years, retirement plan providers have added fun calculators and projection widgets to their websites. Now you can log in, see your account, and quickly assess whether or not the website “thinks” that you are on target to replace some arbitrary percentage of your pre-retirement income. To many people, all of this sounds like a plan.
But it’s not. It’s a mind game or gimmick to get you to save more. Nothing more and nothing less. The website does not know your true financial situation. It doesn’t know whether or not you are paying for college for three children if you will be receiving a large inheritance, if you have investment accounts someplace else, if you have a challenging health issue, or if your goals are such that you will need an even higher income in retirement. It’s just a website with a fun tool on it.
What is missing? How about your own personal definition of wealth supported by your financial capabilities. Too often, we gauge our personal definition of wealth by dollars, but we need to think a little deeper. What makes you feel wealthy? I know lots of people with lots of money, but their health is so bad they cannot travel or enjoy family. To some people, providing an education to their children is the epitome of success. Regardless of how you define wealth, the point is that it is unique to you, and no chart or algorithm that you check on once a year can truly understand this.
We want to help you by making you aware of what a retirement plan really is. It is understanding what is important to you. It is not a measuring stick between you and others. It is a roadmap to managing money stress and finding financial independence. It is how you find happiness, regardless of your financial resources because money is a utility to help you achieve your goals, not the primary focus. A well-designed retirement plan will help you maximize the benefits of your retirement account in relation to the bigger picture which is the most important picture; the picture of your life.
In general, most of us need to save more in our retirement accounts. We need to have professional guidance in selecting the investments and we need to not do silly and destructive things like selling our investments when the account values go down. Most importantly, we need to invest with purpose because purpose is how we prioritize and cope with the ups and downs of life.
Since you probably already have a retirement account, it is the ideal time to start your retirement planning. Let us help you realize your own definition of wealth.
Did this article resonate with you? Would you like to speak to our team? We offer a no-cost, no-obligation first discovery meeting to learn if planning is appropriate for you. We have video-conferencing technology and are not limited geographically. Wherever you are, if you need help, we can help you! Connect with us by filling out our form at www.401ktime.com/contact.