Jan 23, 2018
Understand the fallacy of the magic number that you need to
retire. Learn the dangers of looking at retirement as a dollar
amount that you need to get to. Having a certain amount saved
doesn’t mean that you will retire successfully or be able to stay
retired. What you do with your retirement money is what
Main Questions Asked:
- How much money do you think you will need to retire?
- Is this number giving you a false sense of security?
Key Lessons Learned:
The Problems with Having a Magic Retirement
- Choosing an arbitrary number not based on actual planning. A
lot of people choose a number that is too low. Your focus should be
on what you want your money to do for you in retirement. You need
an income target. Your money plan is what counts.
- It doesn’t account for what happens if you have an unexpected
illness or need long-term care. If someone starts suffering from an
illness, it creates a tremendous amount of stress. These things
need to be accounted for, along with inflation.
- Not factoring in taxes can make your magic number meaningless.
Even with a great retirement strategy, you should factor in taxes.
There are different taxes in retirement like income taxes,
Medicare, insurance, and property taxes. Watch out for one-year
income spike taxes and the pension protection act.
- Managing risk. Failing to protect against market risk will eat
away quickly at your magic number, making it worth less than it was
intended to be. There is an emotional toll when you lose your
earning power. You need a strategy to protect against market
- How are you going to generate income from those assets that you
have saved? You have got to have a strategy to generate income. We
call it a retirement income plan. Watch your asset allocation. This
is a critical pillar that can create success.
Links To Resources Mentioned
Money Map Retirement Review
The dirty secret behind your 'retirement number'
Why $1 Million Isn't Your Magic Retirement Number
Thank you for listening!