Today on MYM360 – a listener question. Kevin asks, “How much money should I be saving for retirement?”
Kevin, that’s really a great question to ask. But I’m afraid the answer will require some work on your part. Advisors generally advise people to save 10% of your income and then to increase it over time to 20% or even 30% of your income with the theory that your income will be higher as you get closer to retirement and you will need less to live on. But as you know that is not always the case, plus many people are now opting to retire a lot earlier not to just go veg out on the couch and watch tv but to travel, to pursue dreams of starting their own business, etc. so you might want to take a slightly different track. You might want to consider exactly how much money you specifically will need. And, I have a three step process to help you get there.
Step 1 of the process is to create a detailed picture of what retirement looks like to you and if you are having trouble coming up with a picture especially if it is far off, substitute the words financial freedom or financial independence for retirement – which to me is a time when you can choose what you want to do (work or not), when you want to do it and for how long.
To get started consider things like:
- the age at which you want to retire
- how you plan to spend you days
- if you have a spouse or partner when will they retire?
In other words, paint a picture of what retirement or financial freedom looks like to you with as many details as possible and write it down so that you can refer back to it. Join us tomorrow for Step 2 of the process – determining how much your financial freedom will cost.
If you aren’t a part of the Minding Your Money Movement, I would like to invite you to join. As we discuss topics each week, we will be sending out worksheets and templates and lots of good info to members so they work on their personal stuff after the show. One of the chief goals of MYM360 is to empower you to create the life you want. You can sign up by visiting our website at www.mym360.com and looking for the red join now button in the right hand corner. Then simply put in your name and email and check your inbox.
And that’s it for today. Got a burning question like Kevin? Send it to me at firstname.lastname@example.org and don’t forget to follow me on Twitter @PatStallworth
Thanks for listening and as always remember that minding your money really is the path to a richer life!