You may have seen a popular advertising campaign that addresses the concept of knowing your "retirement number." In the ads, you see people carrying around seven-figure numbers under their arms, smiling along the way to their destination, and then putting their "retirement numbers" in nice safe places.
This is an effective ad campaign in many ways. One of the messages is that all you need to do to prepare for retirement is know what your retirement number is and then do everything you can to reach that number. But the ads do not address some of the very real problems, and mistakes, that people also have to be aware of when planning for retirement.
First, let's define what a retirement number is. It's the amount of accumulated assets that you need to have in order to generate the cash flow you'll need when you retire. But as important as knowing what your retirement number is, it's also critically important to have the discipline to put away that kind of money. You also need to understand what kind of risk you need to take and what time frame you have in order to accumulate the money you need for your retirement nest egg.
In addition, you need to know what to do once you reach your retirement number. Too many people continue to take more risk than is necessary with their investment portfolios, even after they have accumulated what they need for retirement. As a result, they end up losing a significant portion of their retirement nest egg at just the wrong time. That's why, in addition to knowing your retirement number, you also need to have a retirement roadmap that will help guide you on your journey.
To learn more about determining your retirement number, watch the following video:
https://www.youtube.com/watch?v=cnftT63cMMc&list=UUmVm6e6c604JVkssZEB9HyA&index=4 Mark Singer is a CERTIFIED FINANCIAL PLANNER™ professional and the author of
The Changing Landscape of Retirement—What You Don't Know Could Hurt You. He has been The Retirement Guide to thousands of investors for close to 25 years and is the creator of the Retirement Roadmap and the Financial Organizer System, both of which contribute to a solution to investors greatest concerns—properly coordinating their financial affairs.