Is A $1,000,000 What You Need for Retirement?
If you listen to pop culture finance, they will tell you that you need $1,000,000 to retire. A recent survey suggested that $1,000,000 won't cut it. You need $1.9 million to retire. A client told me that her former financial advisor said she needed $5 million to retire. In looking over her finances, a little bit of retirement planning showed that she could retire today and had nowhere near $5,000,000. How did her former advisor come up with that figure – you guessed it – an educated guess.
There is a lot of guessing and estimating going on when it comes to retirement. With retirement, one size does not fit all. These articles leave critical information.
For instance, are we talking about $1,000,000 in 5 years, 10 years, or 20 years? Due to inflation, $1,000,000 in five years is much different than $1,000,000 in 20 years. It is crucial to consider the present value of money versus the future value of money.
Pop culture finance tends to leave out the essential details of how many years before retirement, income needed at retirement and for how long, investment growth assumption, any pension and or Social Security income expected, etc.
Your values and goals are the basis of a retirement projection. Listening to pop culture finance advice can steer you away from personal goals and lead you down the wrong path. You don't want to begin working toward a plan based on a general recommendation versus based on your specific situation.
ASK BOB about money and investment issues. Bob is always happy to visit with you. Bob Brooks is a Financial Adviser and host of The Prudent Money Radio Show, which airs daily at 3 PM CST on 91.3 FM, 97.5 FM, and 99.9 FM in the Dallas Forth Worth metroplex. Listen online at www,prudentmoney.com/radio-show. You can reach Bob at 972-386-0384 and online at email@example.com.