$5million & your piggy bank: financial planners’ standard target for retirement January 14, 2008

“Mrs. Foster, you & your husband should save at least $5million for retirement…at least!”

[THUNK]

That’s my psychological (& literal) piggy bank passing out from that advice. Most all financial planners I met with last year suggested $5million be our retirement savings target (east coast).

What the SAM HECK do we need to save that amount for?! I’ll calm my drama-momma attitude … & attempt to answer with some calm. Feel free adding ideas to this list:

• Longevity (age 100 to be commonplace)
• Health care (allocate $150k-200k for health care costs excluding long term care)
• Inflation
• Housing (assuming a paid-in-full home, consider property tax per US Treasury)
• Food
• Fun (one trip annually)

With above factored in the equation — leaving $1k/mo for health care costs during retirement — our current retirement savings quest is $2.5million. It makes financial planners smirk but, although hefty it’s an aggressive goal that doesn’t leave my mental or literal piggy bank in shock.

More from:
FreeMoneyFinance writes on the $5million topic with an active discussion thread;

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$1million by 2012: dream it, plan it, live it October 13, 2007

So it’s time to take ownership & aim big.

I remember once being fearless in the face of challenges and dreams — going after them was the fun rush of life. Then on the financial front – I learned how much it costs to retire, to retire with decent health care protection, to raise children and their education, to run one’s own business, and more …. my momentum to achieve sobered-up.

Why is that? Maybe it’s just looking at too much at once -vs- one step at a time. Maybe it’s taking one’s self too seriously. Maybe dreams were too high with resources & energy too low. Is it even possible to have dreams too high?

…a mix of all likely but here’s the sitch: family members need our help. They’d never, ever ask for financial support. But bottom line, their situations are precarious & their means too small to evoke stability on their own. My judgment could be off but after reviewing all up, down, and sideways my husband and I agree taking action helps more than fretting.

And results just don’t fall from the sky. So can we realistically help? yes. Can we preserve our basic needs & personal savings plan too? yes. So is it time for a plan?

Yes and here it is:

$1million by 2012 (that’s $1million in overall paper value vs net).

It makes my stomach tight writing this out, tight as in nervous. But Jonny Goldstein just published his big dream. And his resolve and zeal are contagious.

So here it is:

Summary of Intent:

We are millionaires by 2012. By that year, we will have built our financial wealth to at least $1million through dedicated & united partnership to include: multiple income streams, property ownership in secondary cities, tax control, & wealth protection. Our love of life motivates this intent – and our family, whom we most dearly want to help.

It’s posted at our desks.

…along with the plan, the numbers, the benchmarks, a list of mentors (…need to contact them), & somewhere deep down is something that feels like resolve.

More from:

• Todd Duncan on innovation & reconciling your inner dreamer & inner realist;
• KeyBank & their fresh reminder on making financial goals quantifiable & specific;
• CNNMoney’s nice intro to self-directed IRAs; I/we haven’t built one yet but benefits seem overt.

reviewing one’s portfolio, investing money, & the duh factor September 11, 2007

I meet with the administrator of our retirement plan tomorrow and look forward to nailing down:

• what our monthly contributions should be to retire age 65 with 75% of current salary;
• what our monthly contributions should be to retire age 65 with 100% of current salary (omg that seems nuts but heck why not know the number);
• and the biggie: what our current allocations should be to achieve any or all of above.

I predict we have too many domestic equities (vs having at least some international stocks). But at this point I’m talking out the wazoo.

Considering one’s age & risk tolerance are key, sure. Yet it’s perspective and context that I crave from tomorrow’s discussion (a follow-up to this first meeting).

Beckoning to tomorrow’s planner:

Help us afford more than tooth picks & water during our sunset years!

More to follow post meeting manana.

More from:
Our retirement plan administrator TIAA-CREF

5 second video tip: starting retirement savings August 13, 2007

happy quick tip:

Living in the moment – love it! Just be happy, enjoy life’s simplicity today; don’t fret ’bout 30 years from now.

Well these stats soberly say why retirement plans should be in focus now, front and center.

This stat really inspires present-day planning, as in Holy Smokes!
1% of retiring Americans have enough resources to exceed their expenses.

parents’ retirement planning & reality checks August 10, 2007

Over 50% of American retirees will be wholly dependent on their relatives & welfare subsidies per Richard Paul Evans.

Regarding one’s parents, what are effective ways to plan for this? Surely it’s a matter of good communications with one’s folks, education on potential needs like senior healthcare, and taking incremental steps to prepare (and living within one’s means).

I’d rather have these potentially awkward talks with my parents now – and really enjoy our time on Earth (vs having high-octane financial stress at times when you’d rather be an emotional companion with them).