Are your retirement plans realistic? Regrettably, many others are not. We can get caught up in present needs and lose sight of long-term goals.
Most Americans have no retirement savings. According to the Employee Benefit Research Institute’s 2016 Retirement Confidence Survey, only 24% of baby boomers are certain they will have enough money to retire.
Succeeding in the near term will not bring you to retirement. Whatever your age, stage of life, or career and family-raising years, there is a solution to handle both short- and long-term needs.
Is Your Goal Specific?
What are your goals? Outline clear goals and express your desires. Defining your goals and the path you wish to take may help you stay motivated.
If you want to retire before 65, consider these options:
In my perfect retirement,
How much money do I need to make this happen?
How will I pay for it?
After answering these questions, set a specific goal, such as “I want to retire at 65 with $1.5 million saved.”
If you can imagine it, you can do it. Track your progress using a financial calculator like the TD Ameritrade Retirement Calculator. Seeing your progress will keep you motivated and focused.
How to: When setting long-term goals like retiring at 65, define annual savings metrics. Year after year, evaluate your development and make required adjustments.
Is Your Goal Realistic?
Your goals should be challenging but not impossible. Be realistic in your ambitions and examine their feasibility. If it seems impossible, change variables to make it doable.
Maybe retiring at 65 with $1.5 million isn’t in the cards right now. Modify your strategy:
Can you retire at 67?
Save $900,000 instead.
Can you cut some of your expenses?
Balance the variables to make your goal achievable.
SMART financial goals
Make It Count
Your financial goals should be important. If you don’t like the road, avoid superfluous objectives. You’ll also need to decide how to allocate your goal’s resources. How will this affect other areas of your life?
How to: Examine how a $1.5 million retirement goal by age 65 may affect other financial aspects of your life. Consider this:
- How will this influence your family’s financial needs?
- Do you have a hobby or membership that will hinder your progress?
- Will you have to rebalance your goal or give up other dreams?
- Set a Time Limit
- Every goal should have a time stamp. A deadline fosters a sense of urgency and priority. It also gives you a deadline to aim for.
Setting an overarching deadline for your goal will help you divide it down into smaller, more manageable chunks, like this:
- What can I do this week to achieve my goal?
- Maybe this month?
- Within three months?
- It’s easier to prepare for your ideal retirement if you approach financial planning with honesty and objectivity, using tools like the SMART criteria.