Individuals who estimate the cost of their own retirement dream.

Some employees erroneously believe an expert or some web-based program has the exact answer to their ‘How much money will I need to retire?’ question.

Here’s why ‘the number’ cannot be calculated precisely. If, unfortunately, you are run over and killed by the party bus at your retirement celebration, the cost of your retirement will be around…$0. On the other hand, if you retire at age 60 and live to 105, and continue spending about the same as you were when you stopped working, you will need more money than you made in your entire working career to cover those 45 years. Of course, most people will be somewhere between those amounts.

This exaggerated example highlights the longevity risk. Dozens of other risks could also affect the cost of workers’ financial future, including higher inflation, taxes or medical costs, unforeseen world events, the death of spouse, or a prolonged illness. Uncertainly of the future is reality. Potential risks shouldn’t be hidden from employees. Although some risks can be minimized to a degree, there is no way to avoid the risks that come with getting older, acquiring money, or living.

Although looking for precision is fruitless, planning for the ‘big picture’ is essential…and is the key to creating a personally meaningful target. Do you want to work forever or stop working as soon as possible…live in a bungalow or fancy beach condo…stay put or stay on cruise ships…spend more than you do now, the same, or less? It’s your life…your future financial dream…your decision.