Whether you read the statistics (above) as good or bad news depends a lot on your personal circumstances and outlook on life. One thing is however clear; if you and your spouse reach the age of 65 in good health, there is a 51% chance that one of you will live to be 90.
What does this mean for your retirement planning?
This means that even though the official retirement age is now a moving target, still pushed back towards 70, by several governments in Europe, it would be prudent for you and/or your spouse to expect to have to live off your retirement for more than 2 decades, at least.
Notwithstanding the above, it is human nature to expect the best and not plan for the worst, so if you plan to retire at age 55, your pension and savings will need to fund the preferred lifestyle for you. and your spouse for at least 35 years. years!
Humans are wired to focus on short-term gratification at the expense of long-term goals, which is why financial advisors are here to help you focus on the long term. While the pessimistic sentiment is very understandable given the current year in financial markets, over the long term, the current bear market is less relevant. Less relevant unless pessimism wins you over and you sell when the prices of several asset classes are down significantly from 2022. Part of long-term financial planning is planning so that during these downturns, you don’t have to sell assets and you can ride through those times in the markets without losing too much sleep. And remember the old adage: it’s time in the market, not market timing, that makes the difference to your returns. If properly prepared, no winter is too cold, nor are the winters of the financial markets.
How to retire early
It takes planning and discipline to retire early. You don’t need to be a rocket scientist, you just need to crunch some numbers and be prepared to work hard and apply some structure to the process. Essentially, if you want to retire early, you have two big challenges:
1. You have less time to save for your retirement.
2. You have more time to spend in retirement.
Of course, all things being equal, one could have a simple form, but unfortunately it all depends on when one starts planning for the future. Start by estimating your monthly expenses and calculating the amount you will need in retirement.
5 simple steps to help the thought process:
Step 1: Estimate your retirement expenses
Step 2: Calculate the amount you need for your retirement
Step 3: Adjust your current budget
Step 4: Maximize your retirement accounts
Step 5: Work with a financial advisor
Most people do not know how to approach the subject of investing in the financial market. It may therefore be wise to work closely with an established wealth management company and an experienced financial advisor. An advisor can help you develop an investment strategy to help you reach your retirement goals. They can also show you exactly how much you need to invest each month to reach your goal in a certain number of years.
Key points to remember
Start planning as soon as possible and engage the services of a professional financial advisor today.
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Add Disclaimer: This communication is for informational purposes only and is not intended to constitute, and should not be construed as, investment advice, investment recommendations or investment research. You should seek advice from a professional advisor before embarking on any financial planning activity.