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Listen to Johnson Brunetti's Money Wisdom with Joel Johnson CFP®, host of Better Money Television program and Forbes Contributor. Gain true financial wisdom and advice aimed at educating you about all of your financial options when it comes to retirement so you can make the best decisions for you and your family. Get information and education that can bring you peace of mind with your savings and retirement. Whether it’s your 401k account, IRA, or an underperforming asset, Joel Johnson can answer your questions and make you more aware of issues that may affect you.

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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 matters.

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 Number

  • 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 downturns.
  • 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!