August 2024

You may have seen some of those commercials on TV or in magazines that talk about knowing your number. In fact, one of the biggest questions I get from people who are still working towards retirement is: “How much do I need to have saved to retire?” The simple answer is that amount is different for everyone.

From my point of view, I get quite frustrated when I see articles and advertisements that tell you how much money you need to have to retire comfortably because everyone is so different. The better question is: “How much do you need or are you going to spend each year in retirement?” There are some people who have $1million saved but are only going to spend $40,000 per year, while there are others who have $1million but are going to spend $120,000 per year. The first group will most likely be fine with their accumulated savings, while the second group might need to work longer or save more.

When it comes to retirement living, so much more emphasis should be put on what your needs and goals are versus what your final savings accumulation should be. Yes, they do go hand in hand, but if you don’t know how much you are going to need and want to spend, how will you know how much to save? Your spending amount is the only thing you truly have control over. You can choose to spend more or less each day, week, month, or year. You don’t have control over how much your investments grow or how the stock market performs. You don’t have control over health care costs, but you can control how many vacations you go on and how much each costs. You don’t have control over what may or may not happen with social security, but you do have control over whether you buy the new or used Toyota or the new or used Tesla.

Retirement and living are all about choices. There are the things you need, such as food, clothing, housing, health care, and then there are the things you may want such as a lake house, a new boat, a fancy car, and a frequent vacation. When you are dreaming about what you want your retirement to look like as you are planning ahead, starting to explore, or living in it, let’s put those dreams down in a plan so we make sure we have a map on how to get you where you want to be.

Oh yeah, and if you can also tell me how long you are going to live, that will make everything much easier to plan as well. Ok…maybe that one is a little harder to predict.

Every investor's situation is unique and you should consider your investment goals, risk tolerance and time horizon before making any investment. Prior to making an investment decision, please consult with your financial advisor about your individual situation.

The foregoing information has been obtained from sources considered to be reliable, but we do not guarantee that it is accurate or complete, it is not a statement of all available data necessary for making an investment decision, and it does not constitute a recommendation. Any opinions are those of Stacy Caudill and not necessarily those of Raymond James.