Whether you will read the statistics (above) as good news or bad is very much dependant on your personal situation and your outlook on life. One thing is clear though; if you and your spouse reach the age of 65 in good health, there is a 51 percent chance that one of you will live to reach 90-years-old.
What does this mean for your retirement planning?
This means that even though the official state retirement age is now a moving target, forever being pushed towards 70, by several governments in Europe, it would be prudent for you and/or your spouse to expect to have to live off your retirement income for more than 2 decades, at least.
Notwithstanding the above, it’s human nature to expect the best and not plan for the worst, so if you plan on retiring at the age of 55, your pension and savings would have to fund the preferred lifestyle for you and your spouse for at least 35 years!
The human being is hardwired to focus on short-term gratification at the expense of long-term goals, therefore financial advisors are there to help you focus on the long-term. Even though the pessimistic sentiment is very understandable given the current year in the financial markets, in the long-term the current bear market is less relevant. Less relevant unless the pessimism gets to you and you sell while prices of several asset classes are down significantly over 2022. Part of financial long-term planning is to plan so that during these downturns you do not have to sell any assets and you can ride out these periods in the markets without losing too much sleep. And remember the old adage: it’s time in the market not timing the market that makes the difference for your returns. If properly prepared, no winter is too cold, also not the winters in the financial markets.
How to retire early
It takes planning and discipline to retire early. You don’t need to be rocket scientist just need to crunch some numbers and get ready to work hard and apply some structure to the process. In essence, If you want to retire early, you have two big challenges:
1. You have less time to save for retirement.
2. You have more time to spend in retirement.
Naturally, if all things being equal, one could have a simple formular, but unfortunately it all depends on when one starts to plan for the future. Start by estimating your monthly expenses and calculating how much you will need to retire.
5 simple steps to assist the thought process:
Step 1: Estimate your retirement expenses
Step 2: Calculate how much you need to retire
Step 3: Adjust your current budget
Step 4: Max out your retirement accounts
Step 5: Work with a Financial Advisor
Most people are not familiar on how to broach the subject of investing in the financial market. So it may be a good idea to work closely with an established Wealth Management Company and with an experienced financial advisor. An advisor can help you develop an investment strategy to make it easier to reach your retirement goals. They can also show you exactly how much you need to invest each month to reach your goal within a certain number of years.
Start planning as soon as possible and engage the services of a professional financial advisor Today.
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Add disclaimer: This communication is for informational purposes only and is not intended to constitute, and should not be construed as, investment advice, investment recommendations or investment research. You should seek advice form a professional adviser before embarking on any financial planning activity.