This mornings Wall Street Journal Sunday had a compelling yet alarming article ‘Do You Have Enough to Retire? Do the Math‘ that highlights the lack of a retirement portfolio strategy for many of the 80 million baby boomers.
“Just how much are you going to need in order to retire comfortably?” the article challenges each of us to ask ourselves. Surprisingly, “fewer than half workers surveyed, 46%, had tried to calculate how much they would need for a comfortable retirement.” The article then takes you through the steps to help you determine how much is enough. ”Based on assumptions made, you will need to save about 20 times the annual income you need your savings to generate.” WOW! And to be even more secure they recommend 25 times. NOW WHAT?!?
A plan is what!!! First take yourself through the article’s ‘simple retirement planning worksheet’ then pick up your phone and schedule an appointment with an investment adviser to jump start investing for retirement. For those comfortable tackling this on your own, consider do-it-yourself investing tools. Make sure to have all your account information in front of you to get a clear picture of your financial landscape. It might also be helpful for you to read up on investment options available today so you are informed of their plus and minuses. Being educated will help you navigate through the conversation as they begin rattling off terms such as ‘diversification….asset allocation….rebalancing”. Make sure you also understand the difference between ETFs, mutual funds and index funds. With the goal to have as much money as possible at retirement, you will want to go the route with the lowest cost yet still provide you with diversification and returns.
Congratulations, you are one step closer to retiring comfortably!
