Are You Ready?

It is important to consider the fact that people are living much longer into their retirement years. In some instances people are living 20 or 30 years into their retirement.

It's also important to note that most people fail to invest in their dreams, but willingly invest in $5 cups of coffee, $200 gym shoes, $300 jeans, $500 phones, $3,000 computers, and $50,000 cars that will be outdated in two years or used up in two minutes. The scary fact is that over 60 percent of Americans have less than $25,000 saved for their own retirement. Lifetime cost of healthcare alone for a 65-year-old American couple is now over $280,000.

Here are some other interesting statistics when it comes to people age 65.

Financially at age 65:

45% depend on relatives

30% depend on charity

23% are still working

2% are financially independent

It is often said that if you financially plan to live to age 90 and you die at 70, you had a good plan. If you; however, financially plan to live to age 70 and you die at age 90, you did not have a good plan.

You are responsible for your retirement.

Many people depend on Social Security as the one stop shop for their retirement. Social Security is set up to only cover 40 percent of what most financial experts say you'll need 70-80 percent to live comfortably on in retirement. Taking personal responsibility for your own retirement is the first step toward success.

I want to encourage you no matter where you are in life it's not too late to start. Even I have regrets of not investing earlier for my retirement (like when I started working). The thing to remember is you can't drive forward looking in the rear view mirror. That's why on a car the windshield is much bigger than the rear view mirror...we can learn from our past and mistakes but we must focus on our future and opportunities. So if you wake up with breath in your body you still have an opportunity. All you need is a plan.

 

The way to properly set yourself up to "retire inspired" and reach your dreams is to do the following:

1. Live on a monthly zero-based budget (Everydollar is a great and free budgeting tool to help you do so).  There is also an excellent online course to get you started.

2. Get out of debt as fast as you can. Debt has you borrowing from your future to pay for your past.

3. Build up a 3-6 month fully funded Emergency Fund so when life happens, you are not tapping into your retirement savings to take care of an emergency.

I recommend you follow the above steps in the order listed BEFORE you start investing for retirement. I note first living on a budget because every one of our dollars must have a job. This is the foundational basic plan we must have in getting control of our money. This will also cause us to be focused and intentional with money.As soon as the budget is established you need to build up a baby emergency fund of $1000 so unexpected events won't drag you into further debt by the use of credit cards and loans to cover emergencies when they happen. You then need to pay off all consumer debt because debt is the biggest obstacle to anyone reaching their retirement dreams.

Once the debt is paid off I recommend building up a bigger emergency fund. You may say, "Having 20 or 30-thousand dollars just sitting in a bank account drawing little interest isn't glamorous." Well it is not meant to be. That money is not an investment but rather insurance so when a big emergency happens such as a major medical issue, home repair, car breakdown, or some other unexpected situation you are not borrowing from your retirement fund to cover the expense. Borrowing from your retirement fund to cover an emergency is absolutely the wrong thing to do because you are "unplugging" your investment's ability to build wealth through compound interest.

 

At the point you have your emergency fund in place. I recommend you then invest 15% of your earnings into retirement. I recommend you diversify your investments. In other words don't put all your eggs in one basket. No one should go at this alone so having a good trustworthy investment professional with a heart of a teacher and not a salesman is crucial as you navigate down the road to a healthy retirement.

ChrisHogan360 is a great website to educate yourself on how to invest to receive the greatest return. You can also plug in some numbers to see how much you would need to put aside to live comfortably in retirement.  

 So  my question to you is, "What is retirement to you....an age or a financial number?"

The bigger question is: Are you Ready?

If you need guidance and coaching in making sure you have the foundation and building blocks in place to get you to the point where you can properly start saving for your retirement contact me. Consider investing in yourself so you can be empowered to invest in your future.