Broker Check


March 02, 2018


Presented by Walter Roop CLU, RHU

When I think of retirement, I think of spending every 90 days traveling to different places with my wife tasting exotic cuisines. I want to go fishing in Alaska with my son and buddies. I want to surprise underprivileged children with presents on Christmas, donate to Juvenile Diabetes research and leave a legacy of values and inheritance to my children. More than anything, I want the freedom. I want to enjoy retirement. They say having money is being rich, but having time is being wealthy. It is a goal I am working diligently towards.

In fact, when I talk to people about retirement they also have impressive dreams. However, digging a little deeper, they are not putting in the hard work. They may not have a strategy or simply may just not understand the math behind it.

Of course every person’s budget will vary – some may want to travel Paris in first class and others may want to buy a camper and stay for a week in Yellowstone. You may not be the traveling type. Perhaps you like fashion or cooking. Maybe you like fashion and traveling! Either way, even if your ideal retirement would be staying home and cooking every day, you still want more than just your basic needs met. Especially if you want to eat a choice ribeye with a nice Cabernet. If you have plans to be grandparents do you want to take the whole family out to dinner? Do you want your kids to foot the bill? All of this goes beyond “basic needs.”

So you are on board? You want to have a nice retirement? Start today! Waiting is very costly. A million dollars in your IRA would be nice. Along with Social Security retirement income, it might certainly meet most basic needs, but it wouldn’t provide the lifestyle you want. Many people target that $1,000,000 mark, but if you use the old 4% rule of thumb you would be living off of $40,000 each year. Oh, and by the way, I said 60… most people are delaying their retirement to 66 or 70. Depending on whether or not you like your job or not.

So, how do you do it? It really depends on how committed you are to your goals, one could save 30% of one’s income by making some important life choices. If the household income was $50,000 and $15,000 went into retirement savings you would have about $35,000 to live off of (taxes would be minimal in this scenario). Hey, a lot of people live off of less! The earlier you start, the easier it is. The, “I want to enjoy it now,” argument doesn’t make sense to me. Time will eventually catch up with you.

Though the example may seem a bit extreme, the point is you could save more than you are saving today. Talk to a financial advisor and figure out how to make your retirement dreams a reality. You should what your next egg number is at your target retirement age. $1 million, $2 million, more or less. It applies to you. Yes, the amount you need to save each year will be more than you wanted and you will have to make it a priority, but ask yourself how you want to live during your retirement. If Denny’s breakfast sounds like a special occasion then upgrade your car to the premium audio package today. Hopefully, my wife and I will see you in Italy during retirement.