National Save for Retirement Week serves as a friendly reminder for each of us to look at our personal retirement goals and plan (like we need additional pressure than what Mom and Dad are already putting on us).
As a millennial I know how frustrating thinking about your financial future can be, especially when we’re struggling to get our financial present figured out. My brother, Morgan Castner, is a Wells Fargo financial planner; he once said to me, “Chelsea, you can’t afford not to start paying your future self.” Okay, okay, I get it, but how do I start?
Getting clear about your retirement goal is the first step that sets the tone for all subsequent moves, but this could very well be the step that’s tripping you up. It’s difficult to set a goal today for a change that’s likely 40 years away, especially since your future situation is unpredictable.
A strange analogy came to me while I was thinking about the retirement planning process. Every year for Thanksgiving dinner my mom buys the most gigantic Butterball turkey, unsure of how many guests will actually be sitting around our table. She’s already determined that her goal is to minimize her stress so she can enjoy the day, so buying a bigger bird is her action step to avoid the worry there won’t be enough. The results? Grateful, stuffed guests and enough leftovers to give her a break from the kitchen for the next few days.
If your retirement plan was your turkey, wouldn’t you want to be prepared for the extra guests who might show up unannounced to your retirement party dinner? It could be your spontaneous friend named Vacation or your dreaded second cousin Medical Bill. Unfortunately, life doesn’t come with a recipe that tells how long you have to cook your savings in order to enjoy a happy retirement meal, but what you can do is determine how you want to feel when you hit retirement.
As to not over complicate it, I would suggest simply writing down this sentence: “When I’m living in retirement I’m going to feel _______.” Use words like comfortable, free, liberated, spontaneous, calm, joyful, reassured, whatever comes to you. Then, ask yourself what will it take to feel that way. Will that mean trips all over the world? A second home at the beach? Having enough money to cover unexpected emergencies?
Next, play around and try to come up with a ballpark figure that matches your happy feeling. I suggest using Wells Fargo’s online tool called My Retirement Plan, it makes it easy, clear and fun (yes, I actually said fun) to calculate how much money you would need to be saving now in order to have your retirement dreams become reality.
It’s impossible to plan for what will show up at your retirement dinner, but I suggest you make a plan now that leaves you prepared and ready to welcome it all.