How Much Will I Need When I Retire 

Worldwide, the question of how much money we’ll need when we retire—to live the kind of life we really want to live—has plagued us for decades. Most of us will change employers multiple times in our careers; the time of working for just one company your entire life and retiring with a fat pension and the gold watch is certainly a thing of the past.

According to an article that recently ran on AccountingWEB, employees are more focused on retirement planning, but that focus is often clouded by the inability to properly manage their money.

For example, in the State of US Employee Retirement Preparedness report published by Financial Finesse, 39 percent of employees determined what their financial situation would be like at the age they wanted to retire, but only 18 percent felt they were on target. Of the 82 percent who did not think they are prepared, 74 percent have not taken the first step by even running a retirement projection.

As a young CPA, it may be difficult for you to save for retirement—or even begin thinking about something that may occur as many as 30, 40, or 50 years from now—because you have more pressing expenses, such as college loans, living expenses, and other costs. How can you get ahead of the curve?

“Over a lifetime, most individuals who do well financially do it incrementally and consistently, so it’s important to develop healthy financial habits early on,” says Jean-Luc Bourdon, CPA/PFS, owner of BrightPath Wealth Planning, LLC. “Think of it as financial hygiene. Good financial hygiene comes from daily routine rather than occasional events. Starting to save early builds a powerful habit that allows you to gain financial control—a stepping stone to financial security.”

Bourdon works with clients to help them prepare for the future through careful planning. He says most people fall into one of two predominant behavior categories: savers and spenders.

“Either behavior is habitual and can be quite compulsive,” says Bourdon. “I saw a worst-case scenario spender squander a multi-million dollar inheritance over a few years. He ended up in debt, had to sell his house, and start from scratch. On the bright side, I see many best-case savers who started from nothing and built impressive nest eggs. Habitual saving is a powerful behavior to nurture.”

Forming these good habits at an early age is best, of course, but anyone can improve their behavior through a few simple steps. Here are a few tips Bourdon offers for consideration:

1. Make a budget. It will help you understand your personal inflow and/or outflow dynamic, and guide your choices.
2. Pay yourself first. Put savings aside first and then see what you can spend.
3. Resist sales pressure and impulse buys. Before you make a purchase, ask yourself:

  • Why did I come to this store?
  • Do I really need it?
  • How will I pay for it? Cash or Credit?
  • What will happen if I don’t buy it?
  • What else would I rather use the money for?

4. Be consistently thrifty. Most anything can be bought on sale.
5. Differentiate need and want. Weigh current needs and wants against future needs and wants. Make informed trade-offs.
6. Commit to current and future savings goals in writing. By making your own sort of resolutions and writing it down, you’ll be much more likely to follow through.

Bourdon is often asked by clients and others about an “emergency fund” or more specifically, how much a person needs to put away in savings if he or she suddenly finds themselves let go from their organization or wanting to make some kind of job change.

“The kind of emergency fund someone should have depends on personal factors such as debt payments, health, and how easy it would be to find a similar job,” says Bourdon. “An emergency fund should be sufficient to cover basic living expenses and debt payments for a reasonable period of time. The rule of thumb is three to six months.”

Bourdon has a favorite quote from Samuel Johnson: “Whatever you have, spend less.”

“It’s so simple, but it can also be very challenging,” he says. “Enjoy building your savings! There is an empowerment and pride to being a smart saver.”


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