Last week, as I was teaching a class on retirement planning for adult education at Palm Beach State College, one of the adult students stated, ai???I love my jobAi??Ai??I never want to retire.ai???Ai?? This got me thinking about how many people really enjoy their career, and yet theyai??i??re not able to stop working.Ai??Sometimes itai??i??s poor planning.Ai?? Sometimes itai??i??s ill luck.
Perhaps it is more than just ill luck or poor planning. Could it be thatAi??people focus solely onAi??their job… and do not focus onAi??their retirement? Let me ask you a question: are you so focused on the present, that you miss planning for the future? I think for most of us, we often self-sabotage ourselves for the wrong reasons.
Here is one theory. Many people say that they love their job so much, and how they spend their time now, that they worry they could never replace that love with something as enjoyable during retirement. Thus,Ai??subconsciously (or consciously) they do things to ensure they can never retire.
We all have heard the stories of the 70 or 80-year-old attorney dying at their desk at work; or the white-collar professional spending his senior years as a greeter at Wal-Mart because they did not save enough for retirement.
In retirement planning, there is one assumption that always comes first and that is how much do you need to retire.Ai??That assumption can be based off income, it can be based off of how much you believe you may actually need, or other areas.
The question is how much do you need? The Answer is “Enough”! Enough is the amount you need to cover your expenses during retirement.Ai?? That number can be fairly straightforward and can beAi??calculated by a simple formula.
Take how much you spend after taxes, times it by 30 (the average length of time of retirement), and thatai??i??s the amount of money you need for retirement… assuming no growth and only living 30 years during retirement.
That number can be quite high.Ai?? For example, if your expenses are $50,000 per year, times 30, youai??i??re looking at $1.5 million. Ai??If you have this much saved up, congratulations!Ai?? If you donai??i??t, itai??i??s time to start working on it.
The biggest problem that Iai??i??ve seen recently, is with people who actually enjoy their work.Ai?? We have a lot of clients who are engineers and architects and they really like what they do.Ai?? One of them even said to me, ai???I feel like every day Iai??i??m digging in a sand pit …just like when I was a kid!ai???Ai?? Kind of exciting if that gets you going.
Another said ai???I love organizing things and putting processes in place and watching the business grow.ai??? Both of these individuals–one a structural engineer and the other an operations manager, have not adequately saved for retirement.Ai?? But why?
Maybe it is time to rethink what retirement means.Ai?? One way of ‘not’ looking at retirement, is that you stop working at age 65 and thatai??i??s it–youai??i??re done.Ai?? You sit in a rocker and die at age 67.Ai?? Another way you can look at retirement is you will have opportunities to learn, to educate others, and maybe consult in your field of expertise.
Or you can do something youai??i??ve always been meaning to do… that you never got the opportunity to do… when you were working.Ai??Perhaps is time we all rethink how we view our work experience so that when it comes time for us to slow down or maybe go in a different direction, we can.Ai?? Try not to self-sabotage yourself so that you can have an opportunity to save enough money for retirement.
Max your 401(k) plan, your 403(b), 457 plan or other retirement plans.Ai?? Look for as much of a match as possible by your company.Ai?? Save money outside of your retirement plan in non-qualified (individual or joint) accounts.
Using strategies such as Dollar Cost Averaging as often as possible and enjoy your wealth.Ai?? And as often as you can, find the right professional to work with to gain good advice.
Remember, plan today… protect tomorrow.
Until Next Time.
Peter BlattAi??is the president at Blatt Financial Group. He has more than 17 yearsai??i?? experience in the financial industry. He received a bachelorai??i??s degree in accounting from Boston University, a law degree and a post doctorate degree in tax from the University of Miami School of Law. Peter formerly ran the financial planning department of a Trust Company in Palm Beach. He is an active member of the Florida Bar Association, the Palm Beach County Bar Association and the former secretary of the Tax Section of the Florida Bar. He is the founder of the North County Advisorai??i??s Council. Ai??He has been published or quoted in numerous periodicals including The Wall Street Journal, Yahoo Finance, SUCCESS Magazine and on Fox Business News.