How Do You Know If You’ve Saved Enough for Retirement?

Some people have a long list of reasons why they can’t wait to retire, while others truly enjoy their jobs and are in no rush. If you’re still working, which camp are you in?

If you’re one of those people who wants to retire ASAP, are you constantly wondering if you’ve saved enough for retirement? The answer to that question hinges on your unique situation and what you want to do in retirement. That’s why our team of professionals works together to build personalized comprehensive financial plans that are tailored to each individual’s goals.

When our team builds a financial plan, we need to know the reasons that individual wants to retire. Wanting to stop working is a common reason to retire, but what are you going to do when you stop working? And how much are the things you want to do in retirement going to cost to you?

Believe it or not, but boredom and loneliness can quickly consume your retirement if you don’t plan for it. Instead of deciding to retire on a whim, start planning for retirement about 10 to 15 years from when you want to retire. Along with having age-and date-based timelines of retirement planning considerations, our Retirement Plan Checklist includes a 30-question checklist to help gauge your retirement readiness. Download your copy below.

Retirement Plan Checklist

The Journey Toward Financial Independence

If you change your mind and want to keep working, you can still have the peace of mind of being financially independent. That’s when you’ve reached the point of being able to do the things you want to do, for the reasons you want to do them, without being dependent on a paycheck.

If you’re on the fence about your plans for retirement, pay close attention to our five reasons to retire. We’re going to quickly highlight the five reasons to retire before going over each one in more detail.

Five Reasons to Retire

You’re Done Working; You’re Looking for Freedom
Time Is Your Most Valuable and Scarcest Resource
Eventually, Health Is Going to Be a Factor
You Have Goals for Retirement
You Have a Financial Plan and Know You Can Retire Confidently

1. You’re Done Working; You’re Looking for Freedom

The first reason to retire is one we’ve already alluded to. If you’ve worked for several years and have been saving for retirement, you might be mentally ready to retire. Even if you have enjoyed your career, do you have some things you’re wanting to do in retirement that you might not be able to do as much as you’d like because you’re still working?

We also alluded to being financially independent earlier. A well-planned retirement can truly be a feeling of freedom. At Modern Wealth, it’s our goal to provide you confidence to make informed decisions with your money, freedom from financial stress, and time to spend doing the things you love. And speaking of time…

2. Time Is Your Scarcest Resource

Our second reason to retire is to make sure you’re spending as much time as possible with your loved ones, family, friends, etc. Obviously, the tricky part about time in retirement is that no one knows how much of it they have. We hope you (and your significant other if you have one) live long and happy lives together, but unfortunately, there’s no guarantee that will be the case.

This is another reason why we place an emphasis on helping people reach financial independence rather than getting to retirement. You don’t need to wait until retirement to start pursuing some of your lifelong goals. If traveling is important to you, prioritize that within your financial plan so you can start taking those dream vacations while you’re still working. The earlier you start planning for retirement to know what you want your retirement lifestyle to look like, the better.

Retirement planning requires you to step into the future and reverse engineer from a financial perspective to get the answer of where you are today in relation to where you want to go in the future. If you can’t step into the future to say what you want your future to look like, your financial plan is nothing more than numbers.

3. Eventually, Health Is Going to Be a Factor

One of the reasons that time is your scarcest resource in retirement is because health will eventually be a factor. It’s important to understand that there’s more to your wealth than your finances. Time, health, and your social network are components of your wealth as well. You may be forced to retire due to an illness, your spouse’s illness, or to care for an elderly parent.

Health and time are really intertwined when it comes to reasons to retire. Coming to the realization that your health is going to deteriorate over time is a reason to retire sooner so that you have more time while you’re healthy to do the things you want to do.

The Impact of a Long-Term Care Stay

If your health gets to a point where you require a long-term care stay, obviously that has a huge impact on you. But it’s not just about you. Think about the rising costs of long-term care and the impact it has on your spouse and the rest of your family.

Remember that if you’re on Social Security, the surviving spouse gets to the higher of the two benefits, but the smaller one goes away. That could also impact what tax bracket they’ll be in going forward.

Frontloading Your Spending in Retirement

Again, we hope that you and your partner live long and healthy lives that are full of fun and adventures. But even if you remain in good health, you’re going to want to slow down at some point. So, make sure you live it up in the early years of retirement in terms of traveling and doing the things you love. Many of those things have a cost associated with them as well, so it oftentimes makes sense to frontload your spending in retirement.

4. You Have Goals for Retirement

Our fourth reason to retire is to live out your lifetime goals. What goals and dreams do you have for retirement? Everyone has different things that are important to them. It’s important to have those things in mind as you’re planning for retirement.

It’s easy during your career for your job to become your identity. Well, what’s your identity going to be in retirement? That’s why you need to identify the things that are important to you prior to retirement.

Your Goals Will Change

Your goals aren’t going to stay the same throughout retirement. As your life changes, your goals will change. The beautiful thing about having a financial plan is that if your priorities and goals change, it only takes a five-to 10-minute conversation with your financial advisor to talk about what that really means to adjust the inputs into the plan to give you the answer if it’s OK.

The Coordination Between Spouses

If you’re married, you obviously have more than your personal goals to think about in retirement. What about your spouse’s goals? Sure, some of them you might know, and you might have some of the same goals. However, our advisors have witnessed several couples learn new things about each other as they’re beginning the retirement planning process. Planning for retirement about 10-15 years prior to retirement can only help with making sure you and your partner are on the same page.

5. You Have a Comprehensive Financial Plan and Know You Can Retire Confidently

That segues to our fifth reason to retire, which is having a comprehensive financial plan that gives you a structured approach to retirement planning. What exactly does a comprehensive plan entail, you ask? The answer to that lies within the Modern Wealth Advantage. Our Modern Wealth Advantage Offerings include:

Financial Planning
Tax Planning
Estate Planning
Investments
Insurance

If you’ve been debating whether to hire a financial planner, do you trust yourself to understand all the rules and strategies that pertain to each of our Advantage Offerings? There are so many important items that can be overlooked when taking a DIY retirement planning approach, even if you think a retirement calculator is giving you all the answers you’re looking for.

It’s also asking a lot of one financial advisor to be responsible for everything that comes into play with our Advantage Offerings. That’s why we have a team of professionals that includes CFP® Professionals, CPAs, CFAs, estate planning specialists, insurance specialists, and a company retirement plan team. All those professionals collaborate on behalf of each client as they’re building and reviewing comprehensive financial plans.

We want everyone to have a comprehensive financial plan so they can feel confident about their ability to attain financial independence and retire on their own terms. If these five reasons to retire hit home for you, start a conversation with our team today to start planning for your ideal retirement.

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If there are other reasons you have for wanting to retire, let’s talk about them and build your comprehensive financial plan accordingly. We look forward to discussing your wealth management and retirement goals with you soon.

Resources Mentioned in This Article

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Retirement Plan Checklist

Investment advisory services offered through Modern Wealth Management, Inc., a Registered Investment Adviser.

The views expressed represent the opinion of Modern Wealth Management a Registered Investment Advisor. Information provided is for illustrative purposes only and does not constitute investment, tax, or legal advice. Modern Wealth Management does not accept any liability for the use of the information discussed. Consult with a qualified financial, legal, or tax professional prior to taking any action.