Years ago, in my former life as a roofer, there were a few things I would always check before heading to a job site. Obviously, things like my materials and tools checklist, as well as a weather report.
But one of the most basic things I checked every single day was the gas gauge in the truck I was driving. I'm the kind of person that doesn't like to live below a half tank. That part of my personality has not changed in the decade since I've been doing this job.
When we look at retirement readiness, we use a gas gauge of sorts. But instead of inputting fuel, we input things like age, current salary, current 401K balance as well as contribution rate and match, and outside accounts. based on salary, we are able to make educated guesses on Social Security payouts.
When you add life expectancy to all of this, you have a basic estimate of your likelihood to thrive in retirement.
At this point, one of two things happens. We might see that you are not completely on track for retirement and there are changes to be made. And that's when we look at the effect of increased savings, delayed retirement, or part time work after retirement.
But we might just as easily see that in fact you have saved up plenty in retirement. Not only are you on track to fund all of your needs, but you are also on track to fund your wants and wishes. And sometimes even after throwing rocks at the financial plan (cutting social security, increasing inflation to name a few), you might still be on track.
And that's when the fun begins. That's when you get to dream even bigger about the impact you are going to make and the lives of people that you love. And it all starts by knowing you’ll have enough fuel for the journey.
It all starts with a gas gauge.
Opinions expressed in the attached article are those of the author and are not necessarily those of Raymond James. All opinions are as of this date and are subject to change without notice. Future investment performance cannot be guaranteed, investment yields will fluctuate with market conditions.