It’s one thing to save for your retirement. Saving the right amount is another thing altogether. There isn’t a worse feeling than getting to retirement and knowing that you don’t have enough.
In order to save, our personal cash flow needs to be in the green at the end of each month. How much green YOU need to save, though, is the big question.
Let me explain:
There is a big difference between saving blindly and saving decisively.
Saving blindly occurs when you put an amount, any amount, away every month and simply cross your fingers with the hope that your retirement will work out ok. Decisive saving, on the other hand, means knowing how much it will take to live your retirement without financial worries. Sounds simple right? Unfortunately, this is not the case.
Benjamin Graham, Warren Buffett’s mentor, said figuring out how much you will need for your retirement is one of the toughest calculations there is. Think about it: To become a decisive saver you first need to clearly define all of your costs, both before and after you retire – not an easy task. After that, you need to understand how much income CPP, your other pensions, retirement savings, regular savings, and stock options will generate (a much tougher task). Then, to top it all off, you will need to know what your tax liabilities are and how inflation will impact the picture (mind numbing). Only then can you calculate how much you need to save each month for your retirement.
Is it tough to do this on your own? I would say that it is almost impossible.
How can a Personal Financial Trainer help you?
Decisive saving is the most reliable way to make sure you have enough to retire.
Years ago when I worked for an investment firm, I will never forget speaking with a client who retired a few years earlier. Her retirement savings income and government pensions weren’t providing enough. She wasn’t making ends meet, even after selling her house in the city and moving to the country to reduce her costs.
She felt hopeless and although we did everything we could do on our side to generate income, it simply wasn’t enough. Did she make enough money during her working years? She sure did. But she was a blind saver. She thought she was saving diligently for her retirement but she was really only crossing her fingers and hoping it would work out for the best in the end. Her bustling career never gave her the time to calculate whether her savings were sufficient to fund her “golden years.”
Breakthrough’s Money Mastery Program will make these calculations for you to help make decisive saving easy. We work with you to get the numbers right. You will know what it takes to retire without financial stress and you will know that you will be OK.