I sat across from my clients; we will call them James and Mary. I needed to say it with tact. I wanted to get the message across, but as gently as possible. The words would be devastating to hear. What I was about to tell James and Mary was critically important to their future, and would directly effect them every day for the rest of their lives. I did not want to be the one to tell them. But it was my job, after all. I leaned forward, looked them in the eyes, and stated simply: “You do not have enough money.”
You see, James and Mary did not have enough assets to retire and continue their lifestyle. They had taken retirement for granted. They assumed that if they saved and invested some money, that eventually, around age 65, they would have enough to quit working and continue their American lifestyles. Here is the problem: they never stopped and asked how much. Retirement is a mathematical formula, not an age. Retirement is very attainable, but it takes proper planning! If you do not make a plan, and follow the plan, retirement will not just happen all by itself.
James and Mary did not follow a plan. The consequences of this mistake are massive. They will have two choices going forward. Either they drastically cut their lifestyle expenses now, and save much more, or, they will be forced to drastically cut their lifestyles later when they run out of money in their 70’s. Like any habit, altering a lifestyle becomes more difficult to do the longer you have been accustomed to it. For Americans in retirement age, cutting their expenses can be difficult, embarrassing, and downright traumatic.
This is the story of most Americans. You are either ‘on track’ to retire at some point in the future, or you are not. Most are not. The only way to do it right is to do the math, make a plan, and stick to it.
The purpose of this blog is to give you, the reader, the tools to get your plan together. Knowledge is power.