Yogi Berra, one of the greatest baseball legends to ever live, was once quoted as saying, "The future ain't what it used to be." The financial services industry loves the quote because it helps illustrate the fact that most people are going to need much heftier retirement account balances than we've needed to retire successfully in the past.
For the last two days, I've been in Austin at a retirement plan conference hosted by my broker/dealer - Kestra Financial. One of the topics we covered was the importance of communicating to our clients that "the number" (your retirement account balance at retirement) is much higher than one might expect. Why? There are several reasons.
First, we're living a LOT longer. In addition, many people want to retire earlier than prior generations. There's a possibility that people will spend as much time in retirement as they did in the workforce.
Next, standards of living have increased. If you think about your grandparents, or the Greatest Generation (those born from 1901 - 1927), or the Silent Generation (those born from 1928 - 1945), you'll likely remember people who clipped coupons, worked for the same company until retirement (thus earning a pension), lived in one or two houses that were paid off, and many other behaviors that just aren't a part of our culture anymore. In addition, standards of living today are often supported by debt which sometimes equates to living beyond one's means.
A third reason that most people probably need a higher number than they realize, and the last I'll mention in this article, is that, while we're living longer, we aren't necessarily healthy in our latter stages. Increased healthcare costs are certainly a factor to consider.
A financial advisor has data and tools available to ensure that all of these things are considered in your financial plan so that there are no ugly surprises during the final season of life - a time when the hard work is done and you'll want to enjoy the fruits of your labor.
If you aren't already working with a good financial advisor, consider calling the office to schedule a time to talk. We'd love to help!