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Underestimating Retirement
Last Updated: March 17, 2016
The financial planning industry has overplayed the marketing line ‘what’s your number.” I am referring to how financial literature and commercials primarily focus on having a particular asset value (i.e. one million dollars) and once you reach that mythical dollar amount you can have a successful retirement.
Some of the most successful retirees we work with are the ones who managed their expenses prior to retirement. When they retired, they had minimal expenses. Now apply this to your own situation. If you have little to no debt and are able to live within your means, you do not need a huge retirement nest egg to have a great retirement.
Unfortunately, most people underestimate and fail to plan properly in their pre-retirement years. According to the AICPA* CPA Personal Financial Planning Trends Survey for the third quarter of 2015, more than half of their retirement planning clients underestimated:
- Their retirement expenses (57%)
- Their and their spouse’s combined life expectancies (57%)
- Their individual life expectancies (52%)
- The amount of money they need to be able to retire (54%)
