If you Google "How much money do you need to retire?", you'll get a host of retirement calculators that promise to deliver your own personal retirement "number". While many of these calculators ask good input questions and therefore deliver pretty decent outputs, determining how much money you will truly need is not as easy as filling out an online assessment. After all, many of these calculators rely on you to tell them "how long you plan to live". Retiring with enough money really comes down to finding a process that makes sense for you and matches your lifestyle.
Below are two important first steps to set you on the right path. Whether you're in Massapequa, Long Island, or anywhere else, MLS Financial Planning (MLSFP) can help you think about these and other cash management and financial planning issues and concerns. MLSFP works with clients virtually. Our cutting-edge software allows us to work with clients, at their convenience, with no travel time, all while cutting costs to bring planning to a broader audience.
The first step is analyzing what you spend now because it's unlikely to slow down in retirement. What does often change is how you spend your money. You should start with the essential living costs for keeping a roof over your head and your health in good order. Then list out all your other expenses (breaking them down into "necessities" and "non-necessities"). This is a good starting point to gain a general understanding of how much you will realistically need in retirement.
MLSFP has developed a cash management planning and coaching service to better help clients through this process. Most individuals aren't ready to jump into full financial planning and this is an excellent place to start.
The second step is putting together a savings plan that is realistic for you and your family. You'll want to contribute to retirement savings and investments that balance risk and reward, all without draining your current lifestyle. If your plan is too rigid and leaves you no room for discretionary spending, it'll be much more difficult to stick with it and you may end up setting yourself up for failure out of the gate. The challenge is finding a balance and managing how and what you spend now to accrue enough money towards retirement.
Whether you’re just starting to save, or you're already retired and need some guidance on maximizing your savings — it starts with a plan.
At MLS Financial Planning we believe in:
- Education - We educate you along the way, so you gain independence and confidence surrounding your financial life.
- Understanding - While education is very important, it's equally important that you understand what you're doing in your financial life.
- Simplicity - In a complex world, simplicity is at the root of our thinking.
- Fun - It's also important to have fun along the way.
We also believe that all of the components of financial planning (cash management, investment planning, retirement planning, insurance planning, tax planning, education planning, and estate planning), are important, but not everything has the same level of impact on everyone at the same stage of their financial life. It’s about putting the most effort in the area that has the biggest impact, so you get the best outcome. In our opinion, for most people, between 50% and 75% of their ability to become financially independent is driven by having a great cash management program with coaching.