For some people retirement is all about the numbers; the age you plan to retire, how much money you need, and so forth. We have built our planning processes in financial services based on numbers and algorithms in financial planning software to help us contrive a number or group of numbers that are uniquely yours. But is retirement really about numbers?
Numbers give us a baseline to help you financially plan for today and the future. Your numbers can change throughout your life. Maybe you’re already retired or are within ten to twenty years of retiring, but one thing is clear; numbers play a role in all aspects of your financial life:
Economic conditions affect your retirement savings. This includes inflation and the economy. Inflation determines how much it costs you to live today and how much things will cost when you retire. The economic conditions that affect your employer decide whether if you will have a job. Both of these are caveats in financial planning since both are unknown; we can only make assumptions based on today’s information and can’t guarantee anything in the future. If that leaves you concerned, you’re not alone. The best option is to plan for the unknown and put yourself in a position that if a job loss happens, it doesn’t wreak havoc on your finances while you’re looking for work. There’s not much we can do about the economy, but keeping expenses low will help you if prices dramatically rise or if you suddenly are without a job.
The age you retire relates to two things, your health, and your financial resources. According to the RAND Corporation Center for the Study of Aging, when people are in their late 50’s they start to consider if they should continue working or collect social security as early as possible. This decision is related to their health, and if they’re economically stressed. These individuals tend to retire as soon as possible. Healthy people continue to want to work because of the financial reward of growing their retirement savings and maintaining their current lifestyle. They start to look forward to other jobs they always wanted to do later in life or advance in the career they’re currently in.
Accumulating retirement savings and developing a spending plan is beneficial at any age. Accumulating assets is important prior to retirement. If you don’t have a spending plan during the accumulation stage it may be more difficult for you to save for your retirement. A spending plan in retirement is important as you will not be able to accumulate assets due to no longer working and be on a limited income.
Retirement uses numbers to plan your financial future. This is the best way for advisors to give clients something to understand in theory but also show through software, written financial plans, and concrete information. Retirement really is about numbers when you use them to set realistic goals and stick to them. Our Las Vegas financial firm is ready to assist you in finding and managing your numbers.